John Campbell

Africa in Transition

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

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Showing posts for "Finance"

Some Good News From South Africa

by John Campbell
Early morning smog shrouds suburbs of the coastal South African city of Cape Town as the sun rises June 8, 2006. (Reuters\Mike Hutchings) Early morning smog shrouds suburbs of the coastal South African city of Cape Town as the sun rises June 8, 2006. (Reuters\Mike Hutchings)

It is unduly gloomy in sunny South Africa. The national currency, the rand, is falling; the economy is hardly growing at all; the Zuma administration appears mired in corruption and mismanagement. There has been an upsurge in racist rhetoric. Hence the South African surprise and delight at the announcement that two of the richest South Africans, Allan and Gill Gray, are essentially giving away their wealth to their family foundation. Read more »

IMF Managing Director Lagarde’s Visit a Boost for President Buhari

by John Campbell
Nigeria's President Muhammadu Buhari and International Monetary Fund (IMF) Managing Director Christine Lagarde attend a meeting in Abuja, Nigeria, January 5, 2016. (Reuters/Afolabi Sotunde) Nigeria's President Muhammadu Buhari and International Monetary Fund (IMF) Managing Director Christine Lagarde attend a meeting in Abuja, Nigeria, January 5, 2016. (Reuters/Afolabi Sotunde)

President Muhammadu Buhari faces a serious economic crisis related to the plunge in the world price of oil, slow rates of economic growth, the prospect of rising American interest rates, a falling national currency, and declining government revenues. At the same time, he is working to restructure the economy away from undue dependence on oil by increasing infrastructure investment and vigorously pursuing an anti-corruption agenda demonstrated by the arrests of high-profile public figures. Read more »

Africa Taps Global Bond Markets at Rapid Rate

by Guest Blogger for John Campbell
Stockbrokers trade on the floor of the Zimbabwe Stock Exchange (ZSE) in Harare, February 24, 2015. (Courtesy/Philimon Bulawayo) Stockbrokers trade on the floor of the Zimbabwe Stock Exchange (ZSE) in Harare, February 24, 2015. (Courtesy/Philimon Bulawayo)

This is a guest post by Aubrey Hruby and Jake Bright. They are the authors of The Next Africa: An Emerging Continent Becomes a Global Powerhouse.

Sub-Saharan African governments are tapping global capital markets at a rapid pace, issuing $18.1bn in dollar denominated eurobonds from 2013-2015, nearly triple the $7.3bn issued in the previous three years. Read more »

Africa’s Middle Class

by John Campbell
Miners gesture next to houses, part of a 2.8 billion rand ($255 million) housing project put together by their employer at the WaterKlooff Hills in Rustenburg, September 16, 2014. (Courtesy/Siphiwe Sibeko) Miners gesture next to houses, part of a 2.8 billion rand ($255 million) housing project put together by their employer at the WaterKlooff Hills in Rustenburg, September 16, 2014. (Courtesy/Siphiwe Sibeko)

According to a recent Credit Suisse report, the African middle class is almost seventeen times smaller than had been previously thought. For at least a decade it has been conventional wisdom among investors that Africa’s middle class is growing, that the “lions are on the move” (McKinsey’s phrase), and that the continent is the next China for frontier market investors. In 2011, the African Development Bank’s (AFDB) paper, “The Middle Pyramid: Dynamics of the Middle Class in Africa,” had classified 313 million Africans as middle class, further supporting the optimistic narrative. Read more »

M-Akiba: Kenya’s Revolutionary Mobile Phone Bond Offering 

by Guest Blogger for John Campbell
A customer conducts a mobile money transfer, known as M-Pesa, inside the Safaricom mobile phone care centre in the central business district of Kenya's capital Nairobi, July 15, 2013. (Reuters/Thomas Mukoya) A customer conducts a mobile money transfer, known as M-Pesa, inside the Safaricom mobile phone care centre in the central business district of Kenya's capital Nairobi, July 15, 2013. (Reuters/Thomas Mukoya)

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

The government of Kenya is tapping the country’s digital finance prowess to raise critical infrastructure funds. The National Treasury has teamed up with a local mobile money pioneer, Safaricom, to launch the so-called M-Akiba bond. It is the first government security carried exclusively on mobile phones. Read more »

Star Economist Says Black Economic Empowerment in South Africa Has Failed

by John Campbell
France's Prime Minister Dominique de Villepin (L), Finance Minister Thierry Breton (2nd L), Education Minister Gilles de Robien (2nd R) and Thomas Piketty, director of the Paris School of Economics (PSE), attend the inauguration of the school in Paris, February 22, 2007. (Reuters/Benoit Tessier) France's Prime Minister Dominique de Villepin (L), Finance Minister Thierry Breton (2nd L), Education Minister Gilles de Robien (2nd R) and Thomas Piketty, director of the Paris School of Economics (PSE), attend the inauguration of the school in Paris, February 22, 2007. (Reuters/Benoit Tessier)

On October 3, Thomas Piketty, the French economist and best-selling author of Capital in the 21st Century, said in his prestigious Nelson Mandela lecture that South Africa’s “…black economic empowerment strategies… were not successful in spreading the wealth.” He said that 60 to 65 percent of the country’s wealth is held by 10 percent of the population, compared with 50 to 55 percent in Brazil and 40 to 45 percent in the United States. He made the point that out of the wealthiest 5 percent of South Africans  up to 80 percent are white. Read more »

Putin’s Russia and Africa

by Guest Blogger for John Campbell
Russia's Deputy Foreign Minister Mikhail Bogdanov (C) arrives at the airport in Abuja, Nigeria May 28, 2015. (Courtesy Reuters/Afolabi Sotunde) Russia's Deputy Foreign Minister Mikhail Bogdanov (C) arrives at the airport in Abuja, Nigeria May 28, 2015. (Courtesy Reuters/Afolabi Sotunde)

This is a guest post by Eugene Steinberg, an assistant editor at the Council on Foreign Relations.

From 1961 to 1992, one of Moscow’s most prestigious schools bore the name of Patrice Lumumba, the Soviet-supported Congolese independence leader brutally executed in 1961. Patrice Lumumba University recruited and educated generations of foreign leaders, especially African leaders, and was just one of the many ways in which the Soviet Union cultivated ties with Africa. Then with the fall of the Soviet Union, after years of pouring money, arms, and manpower into left-leaning anticolonial movements, Russia’s presence in Africa, and Lumumba University, nearly disappeared overnight. But today, two decades later, Russia is once again working to establish a foothold on the continent. Read more »

Cleaning up the Mess at the Nigeria National Petroleum Corporation

by John Campbell
Joseph Thlama Dawha (R), group managing director of Nigerian National Petroleum Corporation (NNPC), listens to Bernard Otti, deputy group managing director and executive director for finance and accounts, at a news conference on the forensic audit of the company which was conducted by PriceWaterhouseCoopers, in Abuja February 11, 2015. NNPC said on February 5 that the audit has cleared it of the allegation that it failed to remit $20 billion owed to the state. President Goodluck Jonathan ordered the audit in early 2014 after former central bank governor Lamido Sanusi said an estimated $20 billion in oil revenues had been withheld from the Federation Account. The news conference was held by NNPC to reiterate its position on the matter. (Courtesy Reuters/Afolabi Sotunde) Joseph Thlama Dawha (R), group managing director of Nigerian National Petroleum Corporation (NNPC), listens to Bernard Otti, deputy group managing director and executive director for finance and accounts, at a news conference on the forensic audit of the company which was conducted by PriceWaterhouseCoopers, in Abuja February 11, 2015. NNPC said on February 5 that the audit has cleared it of the allegation that it failed to remit $20 billion owed to the state. President Goodluck Jonathan ordered the audit in early 2014 after former central bank governor Lamido Sanusi said an estimated $20 billion in oil revenues had been withheld from the Federation Account. The news conference was held by NNPC to reiterate its position on the matter. (Courtesy Reuters/Afolabi Sotunde)

The Natural Resource Governance Institute, a New York-based think tank and advocacy organization, has issued a must-read report, Inside NNPC Oil Sales: A Case for Reform in Nigeria. The authors are Aaron Sayne, Alexandra Gilles, and Christina Katsouris. The Nigeria National Petroleum Corporation (NNPC) sells about half of Nigeria’s oil, worth an estimated $41 billion in 2013. Read more »

Better Economic News from South Africa

by John Campbell
Mineworkers walk to the Wonderkop stadium near Lonmin's Marikana platinum mine for check-ins before returning to work, June 25, 2014. Tens of thousands of South African platinum miners returned to work on Wednesday after wage deals ended the longest and most damaging strike in the country's history. (Reuters/Skyler Reid) Mineworkers walk to the Wonderkop stadium near Lonmin's Marikana platinum mine for check-ins before returning to work, June 25, 2014. Tens of thousands of South African platinum miners returned to work on Wednesday after wage deals ended the longest and most damaging strike in the country's history. (Reuters/Skyler Reid)

South Africa’s general malaise owes much to its very slow recovery from the international economic crisis that began in the United States in 2008. The country’s gross domestic product growth rate has declined from a usual 3 percent to 1.5 percent in 2014. Weaker commodities prices have also slowed an economy that still includes a large mineral export sector. Read more »

President Obama Visits Kenya and Ethiopia

by John Campbell
A security guard walks past a wall mural depicting U.S. President Barack Obama outside the Go-Down Art Centre in Kenya's capital Nairobi, July 17, 2015. Kenya is preparing itself for a visit by U.S. President Obama in the coming week. Seen as a son of the East African nation owing to his father being Kenyan, many see this visit as a long overdue homecoming, while others question how long authorities can keep up the upgrades after Obama is gone. (Courtesy Reuters/Thomas Mukoya) A security guard walks past a wall mural depicting U.S. President Barack Obama outside the Go-Down Art Centre in Kenya's capital Nairobi, July 17, 2015. Kenya is preparing itself for a visit by U.S. President Obama in the coming week. Seen as a son of the East African nation owing to his father being Kenyan, many see this visit as a long overdue homecoming, while others question how long authorities can keep up the upgrades after Obama is gone. (Courtesy Reuters/Thomas Mukoya)

Whatever decision the White House makes in selecting the countries included on a presidential visit to Africa, it is bound to draw critical scrutiny. On July 24, President Obama departs for a trip to Kenya and Ethiopia. Two reasons for these two countries seem immediately clear. An important focus of the trip will be the African Union (AU), which has its headquarters in Addis Ababa, Ethiopia, and the Global Entrepreneurship Summit held this year in Nairobi, Kenya. The AU is the lodestar of the “African solutions to African problems” policy, while the Entrepreneurship Summit demonstrates a focus on economic development. Both are policy goals keenly supported by the United States. However, there is also a symbolic significance to this decision. Many in Africa have questioned why President Obama, with a Kenyan father, has not yet visited Nairobi during his presidency. This absence has contributed to disappointment in Africa that the Obama presidency has not been particularly African in its focus. Read more »