John Campbell

Africa in Transition

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

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Showing posts for "Finance"

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 »

Nielsen: Ivory Coast Now Top Business Prospect in Africa

by John Campbell
A worker holds cocoa beans at SAF CACAO, a export firm in San-Pedro, Ivory Coast, January 29, 2016. (Reuters/Thierry Gouegnon) A worker holds cocoa beans at SAF CACAO, a export firm in San-Pedro, Ivory Coast, January 29, 2016. (Reuters/Thierry Gouegnon)

Nielsen’s “Africa’s Prospects: Macro Environment, Business, Consumer and Retail Outlook Indicators” of February 2016 rank orders sub-Saharan Africa’s nine leading markets. The list represents 71% of the region’s GDP, and half of its population. Ivory Coast is ranked first, Kenya second, Tanzania third, and Nigeria is fourth. It ranks Zambia as fifth, Cameroon as sixth, South Africa as seventh, Uganda as eighth, and Ghana brings up the rear. Read more »

South Africa and Barclays Africa

by Guest Blogger for John Campbell
A Barclays logo is pictured outside the Barclays towers in Johannesburg, December 16, 2015. (Reuters/Siphiwe Sibeko) A Barclays logo is pictured outside the Barclays towers in Johannesburg, December 16, 2015. (Reuters/Siphiwe Sibeko)

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

The recent rumor of Barclays PLC’s potential sale of its African businesses has caused a stir in South Africa. While Barclay’s has yet to confirm any decisions, there is plenty of reason to suspect the rumors are credible. Barclay’s has recently had to pay large regulatory fines for illegally rigging the London interbank rate, they have cut back substantially in Asia, and, perhaps worst of all, economic growth has significantly decreased in Africa. If Barclays PLC were to divest of holdings in Africa, it begs the question of who would buy their shares in Barclays Africa, specifically South Africa-based ABSA, one of the country’s largest banks. Read more »

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 »