macroafricaintel Daily Brief | 9 Feb

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji, @macroafrica

Global Markets
• Stocks, oil rise in Asia after US records, dollar weakens
• Bitcoin extends gains above $47,000 in Asia
• Oil climbs to 13-mth highs on output cuts, demand recovery hopes
• Brent up 0.8% at $61.04, WTI up 0.8% at $58.42 (0443GMT)
• Gold gains as dollar extends slide, stimulus hopes firm
• Spot gold up 0.5% at $1,839.02/oz, futures up 0.5% at $1,842.60/oz. (0536GMT)

Key African events or data releases today
[Posts & comments at my Twitter handles @DrRafiqRaji, @macroafrica]
• Kenya parliament resumes; BBI, Ruto impeachment, etc. on agenda
• Nigeria parliament resumes; herder-farmer clashes, crypto ban, etc. on agenda
• Kenya’s Uhuru & Raila campaign for BBI, amid Ruto pushback
• Kenya counties debate BBI, some expected to pass bill during the week
• South Africa state capture inquiry continues
• Ghana supreme court rules on Mahama petition (10 Feb)
• South Africa’s Ramaphosa delivers state of the nation address (11 Feb)
• South Africa manufacturing production Dec-20 [act. -1.3% yy, prev. -3.5%] (11 Feb)
• South Africa mining production Dec-20 [act. -0.5% yy, prev. -11.6%] (11 Feb)
• Covid-19 updates by authorities across the continent

Key African events or data releases yesterday & early a.m today
Reuters
• Nigeria yet to detect South Africa virus variant, to stick with AstraZeneca vaccine
• Ethiopia – ‘People die at home’: Tigray medical services struggle after turmoil of war
• Darfur rebel leaders heads Sudan finance ministry following cabinet shake-up
• Global health officials back AstraZeneca vaccine after South Africa study rings alarm
• Nedbank denies complicity in South Africa corruption, shares fall
• AstraZeneca vaccine has major role to play, South Africa trial lead says
• Somalia opposition cease recognising president as election row escalates
• Global health officials back AstraZeneca vaccine after South Africa study rings alarm
• Flood kills 28 people in illegal factory in Morocco
• South Africa to start covid-19 vaccinations with J&J doses
• Nigeria’s navy to toughen punishment for collusion with kidnappers
• South Africa hopes to get some J&J covid-19 vaccines this week
• Pandemic derails trade for Congo’s disabled border couriers
• African Union must reform to stay relevant – Nigeria’s Buhari
• Exclusive – Angola moves to seize Dos Santos-linked asset in Dutch court

Bloomberg
• Kenya ruling party expels 6 lawmakers in widening rift
• Bitcoin surges past $47,000 for first time after Tesla purchase
• Sudan’s premier adds ex-rebels in sweeping change to govt
• UK officials fear South Africa strain could threaten recovery
• South Africa will stop using AstraZeneca vaccine
• South Africa lawmakers question Eskom on failed housing project
• Nigeria disagrees with advice to devalue naira, IMF says
• Egypt seizes on bond rally with plan to borrow $3 bln
• Kenya Airways ramps up cargo capacity for peak flower season
• South Africa seeks 20 mln J&J vaccines, offered Russia shot
• Tanker leaves Libya port without oil as strikers halt loading

N.B. Full stories of above headlines are available on Reuters & Bloomberg

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macroafricaintel Daily Brief | 8 Feb

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji, @macroafrica

Global Markets
• Hedge funds bet on oil’s ‘big comeback’ after pandemic hobbles producers
• Asia shares, oil buoyant on economic revival hopes
• Brent strkes $60/bbl as supply cuts, stimulus hopes boost prices
• Brent up 1.1% at $59.98, WTI up 1.1% at $57.50 (0537GMT)
• Gold rises on weaker dollar, US stimulus hopes
• Spot gold up 0.1% at $1,813.96/oz., futures up 0.1% at $1,815.50 (0552GMT)

Key African events or data releases today
[Posts & comments at my Twitter handles @DrRafiqRaji, @macroafrica]
• Kenya’s Uhuru & Raila campaign for BBI, amid Ruto pushback [Counties debate BBI, some expected to pass bill during the week]
• South Africa state capture inquiry continues
• Kenya national assembly & senate resume (9 Feb)
• Ghana supreme court rules on Mahama petition (10 Feb)
• South Africa’s Ramaphosa delivers state of the nation address (11 Feb)
• South Africa manufacturing production Dec-20 [act. -1.3% yy, prev. -3.5%] (11 Feb)
• South Africa mining production Dec-20 [act. -0.5% yy, prev. -11.6%] (11 Feb)
• Covid-19 updates by authorities across the continent

Key African events or data releases over the weekend & early a.m today
Reuters
• South Africa puts AstraZenca vaccinations on hold over variant data
• CEO of Egypt’s Juhayna detained, share price tumbles
• Filling Ethiopia’s Renaissance Dam in July threatens Sudan’s security – minister
• Oxford/AstraZeneca covid shot less effective against South Africa variant: study
• Egypt frees Al Jazeera journalist after 4 years in detention
• Thousands protest in Tunis despite police blockade
• New Libya interim govt agreed in UN talks
• UN official warns of high risk of atrocities in Ethiopia
• Nigeria lifts short-lived Emirates flight suspension
• South Africa’s Ramaphosa says access to concessional loans key to Africa’s recovery
• US throws support behind Okonjo-Iweala to lead the WTO
• Somalia leaders fail to break deadlock over presidential vote
• South Africa says secures vaccines for at least 26 mln people
• MTN Group sees annual earnings nearly doubling on Ghana & Uganda tower sales
• Reshuffle at Congo state miner further entrenches Tshisekedi’s authority
• Nigeria negotiates terms with Big Oil to keep investments
• South Africa looks to curb TB infections amid covid-19 disruptions
• South Africa probe finds evidence of political pressure, fraud in covid-19 contracts
• Nigeria film about northern insurgency aims at Oscar glory
• Nigeria’s candidate for WTO chief looks forward to conclusion of race
• WHO’s covax initiative aims to start shipping 90 mln covid-19 vaccine doses to Africa in Feb

Bloomberg
• Meet the Nigeria corruption cop Lagarde expects will ‘rock’ WTO
• An oil country no more? Algeria’s energy exports sink rapidly
• Ebola resurfaces in previous epidemic zone of Congo, WHO says
• Nigeria central bank says cryptocurrencies were a threat
• South Africa to speed up plans to use J&J covid shot
• New Astra vaccine in development to fight South Africa variant
• Zimbabwe in talks with Russia on covid vaccine, Sunday Mail says
• As new Liby authority takes shape, challenges to peace remain
• Ivory Coast arrests 4 for trafficking children to cocoa growers
• Astra vaccine is less effective against South Africa variant, FT reports
• Somalia faces political crisis without deal over election
• Ghana signs long-awaited post-Brexit trade agreement with UK
• Africa’s virus recovery hinges on access to good loan terms
• Mauritius foreign minister quits over difference with party
• US backs Okonjo-Iweala for WTO now set for first female chief
• South Africa’s power grid downed by rain shows its vulnerability
• Nigeria’s power sector gets $500 mln boost from World Bank
• Libya rivals agree on leadership to govern until elections
• Nigeria central bank orders cryptocurrency accounts to close
• Rising Nigeria central bank yields may signal naira devaluation
• Congo Republic to get 100,000 doses of covid vaccine from China
• Equinor says it wins Nigeria case over Agbami oil profits
• Ecobank Nigeria hires Citi, Mashreq for $300 mln eurobond
• South Africa’s MTN jumps as earnings rise on sale of some tower assets
• South Africa probe identifies blatant abuse of virus resources
• Pastor, ex-ministers to run for president in Republic of Congo
• Coca-Cola said to sell $669 mln South Africa bottling stake
• Zamiba finance minister targets IMF deal before August elections
• Korea minister drops WTO bid, clears ways for Nigeria candidate
• South Africa rand gains as traders see signs of fiscal reprieve

N.B. Full stories of above headlines are available on Reuters & Bloomberg

macroafricaintel Daily Brief | 5 Feb

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji, @macroafrica

Global Markets
• Pfizer withdraws application for emergency use of its covid-19 vaccine in India
• World shares close in on record peak as vaccines fuel normalisation hopes
• Dollar outlook still dark, recent strength a blip: Reuters poll
• Oil prices rise to highest in a year on US growth optimism, crude supply restraint
• Brent up 0.7% at $59.24, WTI up 0.8% at $56.65 (0428GMT)
• Gold edges higher; set for worst week in over 2 mths on dollar strength
• Spot gold up 0.1% at $1,794.11/oz., futures up 0.2% at $1,794.70 (0247GMT)

Key African events or data releases today
[Posts & comments at my Twitter handles @DrRafiqRaji, @macroafrica]
• Zero Tolerance for FGM Day (6 Feb)
• South Africa state capture inquiry continues
• Kenya’s Uhuru & Raila campaign for BBI, amid Ruto pushback
• South Africa FX reserves Jan-21 [act. $54.8B, prev. $55.0B]
• Africa heads of state meet for 34th AU summit (6-7 Feb)
• Covid-19 updates by authorities across the continent

Key African events or data releases yesterday & early a.m today
Reuters
• UK detects South Africa coronavirus variant in people with no travel links
• ‘You chop her’: Uganda recalls brutal upbringing as LRA child soldier
• Congo parliament selects new speaker, boosting Tshisekedi’s power
• South Africa’s biggest debt counsellor sees spike in calls in January
• UN warns Tigray conflict could spark broader destabilization in Ethiopia
• Uganda rebel commander Ongwen convicted for sex crimes, forced pregnancy
• Shell needs to take hard look at Nigeria onshore oil – CEO
• 16 Africa nations interested in AU vaccine plan
• Gunmen kill 9 soldiers in Mali attack, army says
• Kenya school gives 2nd chance to teen mums forced out of classes
• Nigeria film about northeast insurgency aims at Oscar glory
• Nigeria court issues arrest warrant for head of ExxonMobil Nigeria – EFCC

Bloomberg
• Rolls-Royce eyes Africa as new energy market with deals push
• Zambia is done for now with taking over mining companies
• China donates 200,000 covid vaccines to Zimbabwe, president says
• Egypt extends rate pause with eye on global economic risks
• Cheap money is reducing demand from Nigeria firms for IFC loans
• South Africa’s upside revenue surprise may help pay for vaccines
• Investors raise $143 mln fund to target Africa’s food supply
• Gambia record remittances make up for tourism losses, IMF says
• UN security council urges access to war-ravaged Ethiopia region
• Legal showdown ahead in South Africa as Zuma defies court order
• South Africa stocks resist global slump as Sasol extends rally
• China to donate coronavirus vaccines to 3 Africa countries
• South Africa: Johannesburg’s first gas-fired power plants planned by Harith
• South Africa treasury likely to maintain bond auction levels
• Zimbabwe, Zambia hydropower plant upgrade delayed by 2 years

N.B. Full stories of above headlines are available on Reuters & Bloomberg

macroafricaintel Daily Brief | 4 Feb

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji, @macroafrica

Global Markets
• Global vaccine trust rising, but France, Japan, others sceptical
• Pentagon, stumped by extremism in ranks, orders stand-down in next 60 days
• Biden decides to stick with Space Force as branch of US military
• Asia stocks ease on China liquidity worries, stimulus hopes lift US bond yields
• Oil climbs after OPEC+ maintains oil output cuts, US stock draw
• Brent up 0.8% at $58.93, WTI up 0.9% at $56.18 (0317GMT)
• Gold, silver ease as dollar holds firm near 2-mth peak
• Spot gold down 0.6% at $1,822.01/oz., futures down 0.6% at $1,823.90 (0330GMT)

Key African events or data releases today
[Posts & comments at my Twitter handles @DrRafiqRaji, @macroafrica]
• South Africa state capture inquiry continues
• Kenya’s Uhuru & Raila campaign for BBI, amid Ruto pushback
• UK-Africa fintech summit (virtual; 3-4 Feb)
• South Africa FX reserves Jan-21 [prev. $55.0B] (5 Feb)
• African Union summit (6-7 Feb)
• Covid-19 updates by authorities across the continent

Key African events or data releases yesterday & early a.m today
Reuters
• UN warns Tigray conflict could spark broader destabilization in Ethiopia
• ICC to hand down judgement against former Lord’s Resistance Army commander
• IED kills 4 Tunisia soldiers in mountain region
• Botswana must diversify to reduce dependence on diamonds – president
• Uganda orders 18 mln doses of AstraZeneca’s covid-19 vaccine
• Guinea says China will donate 200,000 covid-19 vaccine doses
• Nigeria’s Kaduna pairs with Zipline for drone-delivered covid vaccines
• Bulk of loans in South Africa’s covid crisis scheme to stay untapped, say banks
• Shipbuilder in Mozambique debt scandal says made payments to now-President Nyusi
• South Africa Airways could exit administration this month, govt says
• Children in Burkina Faso undergo historic heart surgeries
• Mobile operator Africell secures Angola telco licence
• Tunisia expects covid-19 vaccines from GAVI alliance mid-Feb – minister
• Uganda opposition say 3,000 of their supporters seized since November

Bloomberg
• Tunisia says it’s now or never for painful overhaul of economy
• Nigeria judge issues arrest warrant for chief of Exxon unit
• Africa to start receiving vaccines from Covax by end of month
• South Africa companies to help fund, facilitate vaccine rollout
• Zambia currency’s 42-day losing streak not about to end
• South Africa’s $13 bln virus stimulus is way short of target
• Moderna offers South Africa vaccines in first for continent
• South Africa panel to lodge criminal complaint against Zuma

N.B. Full stories of above headlines are available on Reuters & Bloomberg

macroafricaintel Daily Brief | 3 Feb

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji, @macroafrica

Global Markets
• US stimulus, vaccine progress encourage equity bulls
• Treasury’s Yellen to convene meeting of top regulators on GameStop volatility
• Gold, silver coin demand surging, straining US Mint’s capacity
• Oil rises on falling crude stocks, demand hopes on stimulus & vaccine rollouts
• Brent up 0.3% at $57.62, WTI up 0.2% at $54.87 (0130GMT)
• Silver attempts rebound even as retail sweep wanes; spot up 1.4% to $26.98/oz.
• Spot gold up 0.1% at $1,839.16/oz., futures up 0.4% at $1,840.90 (0052GMT)

Key African events or data releases today
[Posts & comments at my Twitter handles @DrRafiqRaji, @macroafrica]
• IHS Markit releases Jan-21 Africa PMIs
• 2021 Investing in African Mining Indaba (virtual; 2-3 Feb)
• South Africa state capture inquiry continues
• Kenya’s Uhuru & Raila campaign for BBI, amid Ruto pushback
• UK-Africa fintech summit (virtual; 3-4 Feb)
• South Africa FX reserves Jan-21 [prev. $55.0B] (5 Feb)
• African Union summit (6-7 Feb)
• Covid-19 updates by authorities across the continent

Key African events or data releases yesterday & early a.m today
Reuters
• Egypt arrests father, nurse for female genital mutilation of 15-year old
• Tunisia expects covid-19 vaccines from GAVI alliance mid-February – minister
• Shipbuilder in Mozambique debt scandal says made payments to now – President Nyusi
• Uganda orders 18 mln of AstraZeneca’s covid-19 vaccine
• Egypt receives first shipment of AstraZeneca vaccine, cabinet says
• Libya forum starts voting for country’s interim presidency council
• Congo senators move to oust Kabila ally who heads senate
• Uganda opposition say 3,000 of their supporter seized since November
• Impact of Ethiopia’s debt plan on private creditors not yet clear, says adviser
• UK begins door-to-door testing of 80,000 people to halt South Africa variant
• Mali gold production hits fresh high in 2020
• OPEC experts meet as rising oil prices mask demand worries
• Spain to restrict South Africa, Brazil flights over covid variants, report says
• Ford to invest $1 bln to upgrade South Africa operations
• ‘Oxygen, oxygen, oxygen’: Nigeria battles shortages amid covid-19 surge
• In Algeria mountains, army operation shows persistent militant threat
• Kenya recycles plastic waste into bricks stronger than concrete
• Zimbabwe will have access to China covid-19 vaccine soon, ambassador says
• Africa’s pandemic-hit mining sector faces exploration challenge

Bloomberg
• Naira drops even as Nigeria swoops on exporters for more dollars
• World Bank halts $100 mln payment to Congo amid graft probe
• Ethiopia opposition claims 52,000 dead in northern conflict
• MTN hires Citi, Standard Bank for South Africa tower sale
• Record demand at South Africa’s debt sale defies budget risk
• Ford to spend $1 bln in biggest-ever South Africa investment
• Nigeria oil producer plans to triple output from Shell block
• Biggest Africa data centre firm raises $170 mln for new hub
• Rhino poaching in South Africa falls for sixth consecutive year

N.B. Full stories of above headlines are available on Reuters & Bloomberg

macroafricaintel Daily Brief | 2 Feb

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji, @macroafrica

Global Markets
• Asian markets extend gains as sentiment improves on outlook
• All eyes on Alphabet’s first-ever disclosure of Google Cloud profit
• US housing market immune to covid-19 pandemic: Reuters poll
• Oil prices rise as producers commit to output restraint
• Brent up 0.9% at $56.86, WTI up 1% at $54.08 (0134GMT)
• Silver slips from 8-yr peak as investors book profits; spot down 1.7% to $28.48 (0039GMT)
• Spot gold down 0.2% at $1,856.86/oz., futures down 0.3% at $1,858.60/oz.

Key African events or data releases today
[Posts & comments at my Twitter handles @DrRafiqRaji, @macroafrica]
• 2021 Investing in African Mining Indaba (virtual; 2-3 Feb)
• South Africa state capture inquiry continues
• Kenya’s Uhuru & Raila campaign for BBI, amid Ruto pushback
• UK-Africa fintech summit (virtual; 3-4 Feb)
• Africa PMIs Jan-21 (3 Feb)
• South Africa FX reserves Jan-21 [prev. $55.0B] (5 Feb)
• Covid-19 updates by authorities across the continent

Key African events or data releases yesterday & early a.m today
Reuters
• UK detects South Africa coronavirus variant in people with no travel links
• Nigeria expects 41 mln covid-19 vaccine doses from AU
• South Africa’s Denel reports $130 mln loss in 2019/20
• South Africa gets first vaccine doses, bringing relief to health workers
• South Africa mining fatalities rise 18% in 2020 – industry body
• Uganda opposition leader Bobi Wine challenges election result in court
• Ethiopia extends bid times for new telecom licences by a month
• Algeria says it has discussed with Russia producing Moscow’s Sputnik V vaccine

Bloomberg
• Rhino poaching in South Africa falls for 6th consecutive year
• South Africa’s Eskom, Sasol rebuffed, Creecy says as she fights pollution suit
• South Africa secures additional vaccines, eases alcohol ban
• 20,000 refugees missing after Ethiopia camps destroyed, UN says
• OPEC planned output increase is offset by Africa disruptions
• Kenya flower growers need freight capacity for valentine’s day
• UK boosts tests to curb spread of South Africa variant
• Nigeria’s commercial hub begins clinical trial of anti-parasitic Ivermectin
• Ethiopia may engage private creditors after debt review
• Seplat raises $260 mln to complete key Nigeria gas project
• West Africa’s oil exports slump as Nigeria, Angola flows falter
• South Africa set to lift latest ban on alcohol sales as covid infections fall
• Uganda opposition leader Bobi Wine files lawsuit challenging election outcome
• Zuma shuns South Africa graft inquiry in defiance of court order

N.B. Full stories of above headlines are available on Reuters & Bloomberg

macroafricaintel Daily Brief | 1 Feb

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji, @macroafrica

Global Markets
• Wall Street gears up for 2nd bout against Reddit traders
• Asia shares rally as retail crowd catch silver bug; silver prices up
• Republicans press Biden to scale back $1.9 tln covid-19 relief plan
• Oil treads warily higher amid patchy vaccine rollouts, new coronavirus variants
• Brent up 10 cents at $55.14, WTI up 1 cent at $52.21 (0233GMT)
• Silver surges to near 6-mth peak on retail mania; spot up 5.3% at $28.44 (0451GMT)
• Spot gold up 0.8% at $1,860.76/oz., futures up 0.7% at $1,863.40

Key African events or data releases today
[Posts & comments at my Twitter handles @DrRafiqRaji, @macroafrica]
• Ghana supreme court hears from key witnesses in Mahama petition
• South Africa state capture inquiry continues
• Nigeria police chief tenure expires; no sign replacement today
• South Africa’s Ramaphosa receives 1st 1 mln doses of covid vaccine
• Bank of Ghana decides interest rates [fcst. 14.5%, prev. 14.5%]
• Kenya’s Uhuru et al. campaign for BBI, amid Ruto pushback
• 2021 Investing in African Mining Indaba (virtual; 2-3 Feb)
• UK-Africa fintech summit (virtual; 3-4 Feb)
• Africa PMIs Jan-21 (3 Feb)
• South Africa FX reserves Jan-21 [prev. $55.0B]
• Covid-19 updates by authorities across the continent

Key African events or data releases over the weekend & early a.m today
Reuters
• Bird flu kills more than 250 pelicans in Mauritania, says ministry
• Bomb and gunfire rock Somalia hotel, militants claims responsibility
• Fugitive ex-leader of Ethiopia’s Tigray region vows ‘extended resistance’
• Zimbabwe has $100 mln to buy covid-19 vaccines, paper says
• South Africa to receive extra 20 mln covid-19 vaccines, paper says
• Tunisia to issue up to $3 bln debt and push reforms this year, finance ministry
• UN lists candidates to run Libya’s transitional govt until this year’s vote
• Algeria launches coronavirus vaccination campaign
• Wake-up call for Zimbabwe’s elite as covid-19 floods hospitals, killing rich and poor
• CAR suspect to fight war crimes allegations at ICC – lawyer
• More than 200,000 flee ‘apocalyptic’ conflict in CAR
• Congo prime minister resigns, increasing President Tshisekedi’s power
• South Africa cinema group Ster-Kinekor, hit by covid-19 curbs, files for bankruptcy
• J&J vaccine adds to covid-19 armoury, includes South Africa variant
• Ethiopia to seek debt relief under G20 debt framework – ministry
• CAR suspect to fight war crimes allegations at ICC – lawyer
• Airtel Africa to focus on current markets, will not bid for licenses in Ethiopia – CEO
• Kenya aims to vaccinate 16 mln people against covid-19 by June 2022
• Environmentalists, farmers win Dutch court case over Shell Nigeria spills
• South Africa medical schemes divided on vaccine funding model
• South Africa’s MTN wants court to scrap or fix 5G spectrum sale process
• Zambia, Ethiopia next in line for debt relief – France source

Bloomberg
• JP Morgan to BofA see scope for longer South Africa stock rally
• Unexplained elephant deaths resume in Botswana, govt says
• South Africa weighs lifting alcohol ban as covid cases ease: News24
• ANC’s labour ally says party is falling to act on South Africa graft
• Zimbabwe gross revenue collection for fourth quarter over target
• Zambia skips 2027 eurobond coupon payment, finance ministry says
• Ethiopia dissident vows to continue fighting federal govt
• France billionaire puts Mozambique leader at heart of debt scam
• eSwatini revamps tax system, cuts debt arrears amid virus crisis
• Tanzania gold export earnings rise 34% in 2020 on higher prices
• Gambia leader launches party he’s expected to lead in election
• Ghana banks extend relief measures as virus resurgence risks recovery
• Libya oil guards set new salary deadline as exports risk lingers
• MTN files lawsuit to challenge South Africa’s 5G spectrum sale
• South Africa’s Kganyago sees room to react to 3rd virus wave
• Barclays sees upside to South Africa’s vaccine rollout delay

N.B. Full stories of above headlines are available on Reuters & Bloomberg

Capitalism: East or West?

By Rafiq Raji, PhD (Twitter: @DrRafiqRaji)

We are all capitalists now. Even still communist North Korea has a thriving black market. With so many variants of capitalism these days, it is increasingly hard to say definitively what capitalism is. According to Encyclopaedia Britannica, “Capitalism, also called free market economy or free entreprise economy, is an economic system, dominant in the Western world since the breakup of feudalism, in which most means of production are privately owned and production is guided and income distributed largely through the operation of markets. A little complicated? I’ll simplify. In the June 2015 issue of Finance & Development (F&D Magazine), a publication by the International Monetary Fund (IMF), authors Sarwat Jahan and Ahmed Saber Mahmud, break it down quite well. Whereas in socialist societies, “the state owns the means of production, and state-owned enterprises seek to maximize social good rather than profits,” “the essential feature of capitalism is the motive to make a profit (Jahan & Mahmud, 2015).”

According to Jahan & Mahmud (2015), capitalism is founded on the six pillars of (1) private property, (2) self-interest, (3) competition, (4) a market mechanism, (5) freedom to choose, and a  (6) limited role of government. And “the extent to which these pillars operate distinguishes various forms of capitalism (Jahan & Mahmud, 2015).” Broadly, there are two forms of capitalism: free markets and mixed (Jahan & Mahmud, 2015). And I agree with Jahan & Mahmud (2015) when they assert that “mixed capitalist economies predominate today”. Most of the world’s economies take a middle course between private and state ownership; with the preponderance of either one suggesting the tilt. Consequently, varied classifications have emerged. One system identifies four types of capitalism underpinned by entrepreneurship: “state-guided capitalism”, “oligarchic capitalism”, “big-firm capitalism” and “entrepreneurial capitalism” (Jahan & Mahmud, 2015). This is a needless complication for our purposes.

The goal is to compare how the West (e.g., United States) and the East (e.g., China) have gone about achieving prosperity at scale for their respective populations. There is consensus that but for China’s embrace of some form of Western-style capitalism, it would have remained in the doldrums. What is interesting in the Chinese case is that it took lessons from the various Western experiences and those of pioneering Asian peers, replicating what worked, while avoiding some of their mistakes. We could not say for sure as yet which of the East or West got it right. And as we move further along in the discussion, the recurring insight is that there is truly nothing new under the sun and that ultimately, African economies looking to lift their populations out of poverty, would find that it is how they adapt what they know about these systems to their own peculiar circumstances that would determine how successful they become.

Intelligent learning

In his 2020 book, “China: The bubble that never pops”, Bloomberg chief economist, Thomas Orlik, attempts to explain what underpins China’s continued economic success. To be honest, and Orlik (2020) acknowledges as much, China’s resilience continues to surprise many. And even as it braves crisis after crisis, the sceptics believe it is only a matter of time before it unravels. That said, most agree that China’s resurgence began with Deng Xiaoping’s accession to paramount leadership in December 1978 with his “resolutely pragmatic ‘practice is the sole criterion of truth’…guiding philosophy (Orlik, 2020).”

Firstly, in December 1978, China abolished agricultural collectives, beginning the “household responsibility” system. Orlik (2020) asserts this was a turning point in China’s economic evolution because “by restoring the link between effort and reward”, China’s farmers stopped free-riding on their compatriots and “put their backs into it”. “By 1984, 99 percent of rural households were participating in the [household responsibility] system, up from 1 percent in 1979. Next came “enterprise autonomy” for industry, gradual elimination of price controls, allowance for sale of “above-plan output” and a greater profit-sharing in favour of entrepreneurs (Orlik, 2020).

Naturally, China was thereafter ready to conquer the world. In this regard, China set up special economic zones, within which “import and export tariffs were relaxed, businesses could operate according to market principles, free of the constrictions of China’s still-planned economy (Orlik, 2020).” From a real GDP growth rate of -1.6% in 1976, China grew by 15.2% in 1984 and after slowing to a 3.9% rate in 1990, has been accelerating largely above 6% annually ever since. Yes, there are contentions about the accuracy of its output data. What is not in doubt is its economic success. Even so, it is still widely believed that its success would not be sustainable.    

Pundits expected China to unravel in 2016, for instance. One Washington Post op-ed in mid January 2016 captioned “The China bubble pops” triumphantly opined “no longer are the country’s economic managers viewed as magicians who can orchestrate rapid growth whatever the obstacles.” Its equity market was in turmoil and its debt markets were on steroids. According to Orlik (2020), the authorities faced an imposible choice. They could sustain the credit bubble till it popped or they could deflate it. Either choice would be consequential for economic and social stability. Maybe the mostly western pessimists should have held their horses a little bit longer. Because to the surprise of many, the Chinese authorities managed to pull out a rabbit yet again. “Two years into the deleveraging campaign, China’s policymakers had achieved faster growth, a steady debt-to-GDP ratio, and a shrinking shadow banking sector (Orlik, 2020).”

So, how did the Chinese manage to do the impossible? Orlik (2020) believes the resilience of the Chinese economy was underestimated. More importantly, the “ingenuity of policymakers” and “unusual resources of an authoritarian state” proved decisive (Orlik, 2020). The politics underpinning Chinese capitalism, which ordinarily constrains the kind of game-changing innovations that only a free society can incubate, did come in handy when crisis hit, though. Actually, at the initial stages of an economy’s development, freedom might not be as differential we might think. A firm, determined and visionary leadership matters more in those early days. For instance, after witnessing the United States’ decimation of Japanese cities Hiroshima and Nagasaki with nuclear bombs, the Chinese saw an urgent need to have nuclear weapons of their own.

But how to go about it? Since they did not have the know-how, they sought help from the Soviet Union, which obliged in the “spirit of communist brotherhood” (Orlik, 2020). But not for long, as Soviet politics tilted towards a rapprochement with the West. In Orlik’s (2020) narration, Chinese leader Mao was not particularly enthused about acquiring nuclear weapons in any case. China would go on to detonate an atomic bomb in October 1964, five years after the Soviet abandonment. How did they do it? They did it by “drawing on what they had already learned from some fourteen hundred Russian advisors, gleaning further insights from scientific publications in the United States and Europe, and peeking in on other countries’ weapons tests (Orlik, 2020).” 

They would later apply the same “copy” strategy to strengthen their industrial base in the 2000s. China joined the World Trade Organisation (WTO), boosting exports. It closed many of its state-owned enterprises and cleaned up its banking system. But “even as exports were booming”, with annual growth in overseas sales topping 40 percent, Chinese firms made limited technological input (Orlik, 2020). “Chinese firms and workers were confined to the low-value, low-wage task of snapping the pieces together (Orlik, 2020).” Instead, “high-tech inputs came from Japan, Korea, and Taiwan”, with American and European multinationals retaining ownership and control of intellectual property and brands (Orlik, 2020).

“Multinationals did their research and development in their home country, leaving China in the dark on how new products and technologies were developed (Orlik, 2020).” Clearly, if China wanted to develop further, it had to do something drastic. And that is exactly what it did. According to Orlik (2020), China decided it would have “control of the technologies that were necessary to the next stage of its development (Orlik, 2020).” Leveraging on its huge population of more than a billion people, China demanded foreign firms form joint ventures with local firms or required they “hand over valuable technology as the price of market entry (Orlik, 2020).” The rest as they say is history.

Balance matters

In his 2020 book, “When more is not better: Overcoming America’s obsession with economic efficiency”, Roger Martin, emeritus professor of strategic management at the University of Toronto’s Rotman School of Management, describes an American capitalism that has become “out of balance”. Americans feel left out from the economy. They do not “feel that the economy worked for them.” Additionally, “people were decisively disengaged from politics.” These were the findings from a study Martin (2020) prefaced his book with to show how Western capitalism is becoming increasingly underwhelming. As showed in the Eastern case, politics matter. And the whole essence of so-called “democratic capitalism” is the democratic component. But with people disillusioned with politics in the West, there is increasingly less democracy in the “democratic capitalism pudding.” The result? Increasing inequality, monopolies and an ineffective politics-business feedback mechanism. Big business could literally get any laws it wants passed through well-funded lobbyists. Politicians rely on donations from the business community to get and stay elected. Thus, the very elements of Western capitalism that recommended it to many, its free markets, transparent politics, and effective justice system, are increasingly falling victim to the deep pockets of business and associated corruption. “What was once a sterling feature of the American experience, economic mobility in the land of opportunity, has ground to a halt. Strong improvement in mobility in the 1940s and 1950s gave way to slower improvement in the 1960s and 1970s, and to slight decreases since (Martin, 2020).” But does that suggest the Eastern version of capitalism is better?

Martin (2020) argues that a preponderant focus on efficiency is largely responsible for the prevailing despondency with democratic capitalism in the United States. “Rather than striving singularly for ever more efficiency, we need to strive for balance between efficiency and a second feature: resilience (Martin, 2020).” According to Martin (2020), “a system is resilient to the extent that over time it can adjust to its changing context in ways that allow it to continue functioning and delivering its desired benefits (Martin, 2020).” And in the past, America demonstrated remarkable resilience. “In the depths of the Great Depression, American democratic capitalism was resilient. It shifted, adjusted, and adapted to the shocks to its core, but it maintained the combination of those two features: democracy and capitalism. In many other developed countries, democratic capitalism was not sufficiently resilient to survive and was replaced by fascism or communism (Martin, 2020).”

So, what has changed? How did a system, which came out of the trauma of the Great Depression even stronger, transform to the current sorry state? Martin (2020) blames the prevailing view of the American economy as an efficient machine. “Pursuit of efficiency is definitively not a bad thing. The rise in the standard of living of the average family in America from the Revolutionary War to the present is substantially the result of much higher efficiency today compared with that of centuries ago. But there is ample evidence that the pursuit of efficiency just isn’t working as well now – and hasn’t been for almost half a century (Martin, 2020).”

To fix things, Martin (2020) suggests seeing the economy as a complex adaptive system instead. That is, one that is not left unhinged, where profit is not the only motive, and allows for a systematic periodic adaptation to the inevitable change of circumstances, factors, and constraints over time. Ordinarily, it would be assumed that the American capitalist system would be easily adaptable to changing circumstances. After all, if a vibrant media keeps politicians on their toes, and errant public officials are replaced via the ballot box at regular intervals, and a meritocratic system ensures the best brains excel to the top, then the system should naturally evolve and correct itself as variables change, as they most surely do. And as Martin (2020) highlights, that was in fact the case in America once. That has changed, however. For instance, legislations are difficult to change once they become laws. Take Obamacare, which though loved by many Americans, was one legislation former President Barack Obama’s opponents in the Republican Party were determined to “repeal and replace” but have thus far failed to do (Martin, 2020). Knowing this, sponsors of self-interested legislations could milk the benefits for years before even the slightest possibility of a change. Martin (2020) suggests a remedy to the dysfunction: “Retire the machine model of the economy and consciously adopt the model of the natural system” with the three core features of “complexity, “adaptivity, and “systemic structure”.

Canada is proof western capitalism needs to have built-in safeguards. Does it surprise anyone that Canada was largely unscathed by the most recent global financial crisis despite its close connections with the United States? It was not just  good fortune. Martin (2020) points to certain features in the Canadian financial system to show why. For instance, there is a required decennial review provision in Canada’s financial regulatory regime. “Regardless of the situation, regardless of the political context, [Canada’s Bank Act] was to be formally reviewed every ten years (Martin, 2020).” Now shortened to every five years, the periodic review “enabled Canada’s regulators to balance continuity with change, tweaking regularly so that the system never becomes unbalanced (Martin, 2020).” There were other factors; like not allowing the big banks to merge, a more proactive informal non-punitive ex ante regulatory style, and so on. But the part about the review is more pertinent to our exposition as it is evidence that capitalism when left to its whims and caprices births an American and global financial crisis and when safeguarded like in the Canadian case, achieves better and sustainable outcomes.

That said, it might actually be erroneous to say America is in bad shape. Put another way, if the American economy seems sluggish or less vibrant, it could be argued to be the consequence and evidence of its success. That is the argument pushed by Dietrich Vollrath, economics professor at the University of Houston in his 2020 book “Fully grown: Why a stagnant economy is a sign of success”. “Slow growth, it turns out, is the optimal response to massive economic success (Vollrath, 2020).” According to Vollrath (2020), “starting around the early 2000s, the growth rate of real GDP in the United States dropped compared to the historical norm of around 2.25% per year, and now is somewhere around 1.0% per year (Vollrath, 2020).” Does that mean America is falling behind? Vollrath (2020) does not think so. Instead, he believes “compared to other developed economies, the growth slowdown in the United States is not extraordinary (Vollrath, 2020).”

According to Vollrath (2020), even though “China’s real GDP per capita grew very, very quickly compared to that of the United States in the past twenty years…[it] is not an indication that the US fell behind in the level of living standards.” In fact, Vollrath (2020) believes “even if China manages to retain its high growth rate, it will still be another twenty-five years before real GDP per capita catches up to the US level.” And he is doubtful that China would be able to sustain such high growth rates for long. In any case, an investigation into what underpins the prevailing US growth slowdown allows us garner insights into the potential pitfalls of Western capitalism to avoid. For instance, Vollrath (2020) finds that “the single most important explanation for the [American] growth slowdown was the decline in the growth rate of human capital per person.”

From a growth rate of 0.96% in the twentieth century, America’s human capital per capita has declined to -0.15% in the twenty-first century (Vollrath, 2020). “The fall in fertility rates during the twentieth century can explain much of that slower human capital growth”, Vollrath (2020) finds. And he argues this in itself is due to American success. Because as wages rose, Americans chose to marry later and have fewer children (Vollrath, 2020). Also, labour-saving household technologies “made remaining single a more attractive situation – for both men and women – and contributed to the delay in the age of marriage and a reduction in the marriage rate overall (Vollrath, 2020).” And having chosen to marry later, there was also a reduced amount of time to have and care for children. The resultant effect was slower population growth and by extension, reduced human capital.

Vollrath (2020) also suggests another reason for the American growth slowdown: “innovations are getting harder to find.” Another potential explanation, albeit tenuous, is the increased concentration of firms and the observed consequent reduction in net investment. This would be “consistent with the basic theory that firms with market power restrict output in favour of keeping their prices above costs (Vollrath, 2020).” It is also tempting to suggest that China’s rise underpins the American slowdown. This is not totally baseless.

There is evidence of significant American manufacturing unemployment owing to Chinese competition. But as Vollrath (2020) asserts, that in itself was not significant enough a factor in the American growth slowdown. “The growth slowdown would have happened even if China had never become a major exporter, as the US was already in the middle of a long-run shift away from goods production toward services production (Vollrath, 2020).” Yes, “China accelerated this in a small way but was not responsible for it (Vollrath, 2020).” What really underpins the American growth slowdown are “the drop in family size and population aging…[which] lowered the growth rate by about 0.80 percentage points all by itself,…the shift from goods to services [which] took off another 0.20 percentage points, at least…[and when put together, both]…account for the three-quarters of the drop in the [American economic] growth rate (Vollrath, 2020).”

Chart your course

Any form of capitalism can be dimensioned along three lines: politics, production, and profits. The politics determines the rules and ownership of production. How the surplus from production is shared determines the incentives for either efficient or innovative production or both. Efficiency could almost certainly be assured in a totalitarian state. Innovation, however, thrives better in free societies where risks are appropriately rewarded and the gains not expropriated by the state. Thus, what is ideal is to have an efficient and innovative production sphere. And as our exposition shows thus far, the eastern and western variants of capitalism have their pros and cons. The key then is not to be entrenched with either. Instead, an aspiring African country should look to take the pros from each type and do its utmost to avoid the cons.

Many African countries desire to follow in China’s footsteps. Unfortunately, they would only be able to do so to a limited extent. And as the increasing success of “copycat” Asian countries like Vietnam, Philippines and Bangladesh shows, even such small feats can still be transformational. However, even those countries may be approaching a premature climax. This is because the expectation that as labour costs rise in China, global supply chains would migrate to lower cost jurisdictions, may not materialise as much as hoped. The “mastery of a new generation of automated production processes may enable China to retain its low-cost advantage (Orlik, 2020).” Still, “China’s technological gains won’t end the migration of labor-intensive employment to Southeast Asia. But it could significantly reduce its scope (Orlik, 2020).”

More importantly, and certainly more relevant for African policymakers, is how the Chinese have approached development. In other words, what they have done is not really as important as how they have gone about doing it. Chinese policymakers’s success with bringing their 2015-16 financial market troubles under control did not happen by chance. According to Orlik (2020), an elite team from the central bank and thinktanks “delved into the history of the Great Depression of the 1930s and the great financial crisis of 2008, aiming to discover the underlying patterns at work (Orlik, 2020).” And even as they drew lessons from these experiences, they still charted an independent and clearly informed middle way that continues to be vindicated. For instance, when faced with the risk-reward tradeoff of opening its capital account, “China’s policymakers found a middle path – opening the capital account to long-term, patient investors while keeping it closed to the destabilizing influence of short-term speculators (Orlik, 2020).”

Quite frankly, China was not expected to make the transition from an investment-driven economy to a consumption-based one easily. “Ghost towns of empty property, local government debt, and shadow banking were all identified as triggers for a system-shaking crisis (Orlik, 2020).” Well, the pessimists have been proven wrong thus far. This is not entirely surprising. “China – for all its dysfunctions – can, when it needs to, move with unity of purpose (Orlik, 2020).” That is not something easily achievable in the West. In carte blanche competitive Western economies, “cooperative outcomes [are] harder to achieve (Orlik, 2020).”

That is not to suggest that Chinese capitalism may not yet unravel. Because despite its strong fundamentals, “China has faced and continues to face very serious structural problems (Orlik, 2020).” Still, the system has held up astonishingly well thus far. Why is that? Orlik (2020) identifies four factors at play: (1) “China has underappreciated sources of strenght” (2) “The tradeoff between policy choices is overstated” and (3) “As a single-minded, single-party state, China has unique resources”. Put another way, “one reason they’ve been successful: something economists call the “advantage of backwardness,” a path to growth simply by following in the technology and management steps traced out by global leaders (Orlik, 2020).” But is that enough? African countries are similarly poor as China once was but are yet to excel like it did. Orlik (2020) obliges: “What’s accelerated China up the development ladder is its 1.3 billion population and can-do-government.”

Besides, foreign firms did not mind giving away their technology in exchange for market access to more than a billion potential customers once the government insisted. A similarly determined African government could hardly muster as much clout. That could change, though. A continental free-trade area of as many customers on the continent means if similar cooperation can be inspired towards technology transfer, there might still be hope for Africa in this regard. Besides, China was at a vantage point to observe the successes and misadventures of neighbouring Japan, South Korea and Taiwan. “The combination of space for development, enormous size, access to foreign technology, and a ready-made blueprint for development gave China a major head start (Orlik, 2020).” “A high savings rate, controlled capital account, and a state-owned banking system” also helped (Orlik, 2020).

Also bear in mind that the state actually plays a more active role in Western democracies than is let on. This is the main point made by University College London economics of innovation and public value professor, Mariana Mazzucato, in her 2013 book “The entrepreneurial state: Debunking public vs private sector myths”. According to Mazzucato (2013), “despite the perception of the US as the epitome of private sector-led wealth creation, in reality it is the state that has engaged on a massive scale in entrepreneurial risk-taking to spur innovation.” Four prominent examples are the US government’s “Defense Advanced Research Project Agency (DARPA), Small Business Innovation Research (SBIR), the Orphan Drug Act (the EU passed its own in 2001, imitating the US act passed in 1983) and the National Nanotechnology Initiative (Mazzucato, 2013).”

In his 2020 book, “Has China won? The Chinese challenge to American primacy”, distinguished fellow at the Asia Research Institute, Kishore Mahbubani, assesses the seeming American lethargy as follows. “One reason the West can no longer dominate the world is that the rest have learned so much from the West. They have imbibed many Western best practices in economics, politics, science, and technology. As a result, while many parts of Western civilization (especially Europe) seem exhausted, lacking drive and energy, other civilizations are just getting revved up (Mahbubani, 2020).” And on China, Mahbubani (2020) had this to say: “Chinese civilization has had many ups and downs. [Thus] it should be no surprise that it is now returning in strength.” Thus, what may seem like maverick or courageous divergence from orthodoxy on China’s part, could be traced to its complex history and evolution, which was characterised by huge failures and successes in almost equal measure.

As Professor Wang Gungwu of the National University of Singapore observes in Mahbubani (2020), “while the world has had many ancient civilizations, the only ancient civilization to fall down four times and rise again is China. As a civilization, China is remarkably resilient (Mahbubani, 2020).” African countries which see China as a model must bear this in mind. The resilience that underpins China’s remarkable success cannot be learned. There is a necessary indigenous and experiential element. Mahbubani (2020) highlights this feature in the Chinese case succinctly: “Cultural confidence, which the Chinese have had for centuries, combined with what China has learned from the West [are what] have given Chinese civilization a special vigor today (Mahbubani, 2020).” Besides “America has been walking away from [its] institutions, while the rest of the world, especially China, has been walking toward them (Mahbubani, 2020).” 

Still, it would be hasty to dismiss America entirely. This is because it has entrenched cultural elements that suggest it would likely prove resilient and resurgent yet again. Where “in many societies, the tall nail that stands out is hammered down,…in America, the tall tree is worshipped (Mahbubani, 2020).” Thus, there is no gainsaying the fact that “no society has as powerful an ecosystem as America for producing strong individuals (Mahbubani, 2020).”  And eastern societies like China’s are not wired similarly. Put more dramatically, “China stood up again after a hundred years because of a towering figure like Mao Zedong. American society produces many Mao Zedongs (Mahbubani, 2020).” And despite China’s demographic advantages, America surpasses it by far in its ability to attract the best and the brightest.

Besides, “in America, the rule of law is stronger than the government of the day (Mahbubani, 2020).” We saw proof of that in how despite former President Donald Trump’s negative and disruptive tendencies, American institutions proved resilient. China has not been similarly fortunate; even by its own standards. For instance, President Xi Jinping has managed to install himself as leader for life in defiance or in spite of instituted term limits. And even as the Chinese Yuan is gaining ground in global marekts, it would hardly succeed in displacing the American dollar if China is unable to match America’s adherence to the rule of law and the primacy of democratic institutions over any individual, no matter how highly placed. And because America allows dissent, encourages and support diversity, and challenges conventional wisdom, it has created “the most powerful intellectual ecosystems in the world (Mahbubani, 2020).”  In China, where the reverse is the case, it is almost a certainty that its technological progress would be stunted at some point.

Still, China is almost certain to become the world’s largest economy in a decade or so. How long it would remain so when it does is anyone’s guess. But would that be evidence of the supremacy of its capitalism? After our exposition thus far, you could not say for sure. African policymakers would find useful ideas in both systems. Even so, there would always be peculiarities in their respective economies that require new and independent thinking.

macroafricaintel Daily Brief | 29 Jan

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji, @macroafrica

Global Markets
• The “GameStop effect” could ripple further as Wall Street eyes short squeeze candidate
• Facebook shuts popular stock trading group, small investors behind surge hit by trading curbs
• Equity futures slide on nerves over retail-trading frenzy
• UK bans direct flights from UAE, shutting world’s busiest international route
• Oil steady as supply cuts offset demand worries on stalled vaccine rollouts
• Brent up 4 cents at $55.57, WTI down 7 cents at $52.27 (0520GMT)
• Gold on course for monthly decline as dollar firms
• Spot gold up 0.1% at $1,842.58/oz., futures up 0.2% at $1,844.20 (0326GMT)

Key African events or data releases today
[Posts & comments at my Twitter handles @DrRafiqRaji, @macroafrica]
• Ghana supreme court starts substantive hearing of Mahama election petition
• Kenya’s Council of Governors elects new chairman
• Kenya BBI campaigns intensify; Uhuru meets top Mt Kenya state officials on strategy in Sagana (30 Jan)
• South Africa state capture inquiry continues
• Virtual World Economic Forum (24-29 Jan)
• Bank of Ghana MPC meets [fcst. 14.5%, prev. 14.5%] (26-29 Jan & 1 Feb)
• Kenya inflation Jan-21 [fcst. 5.6% yy (1.0% mm), prev. 6.1% (1.0%)]
• South Africa PSCE Dec-20 [act. 3.6% yy, fcst. 3.6%, prev. 3.4%]
• South Africa M3 Dec-20 [act. 9.5% yy, fcst. 9.5%, prev. 8.2%]
• South Africa trade balance Dec-20 [prev. ZAR36.72B]
• Covid-19 updates by authorities across the continent

Key African events or data releases yesterday & early a.m today
Reuters
• South Africa trial of Novavax vaccine seen to be 60% effective says head of trial
• First know US cases of potent South Africa covid-19 variant found in South Carolina
• Nigeria repatriates hundreds of migrants from Saudi Arabia
• Story on Uganda army killing Somali militants withdrawn
• African Union secures extra 400 mln vaccine doses
• Toyota South Africa to produce new model creating over 1,500 jobs – CEO
• Death toll from storm Eloise rises to 21 across southern Africa
• Congo prime minister accepts vote of no confidence
• Budget woes mean South Africa doctors jobless while hospitals battle covid-19
• Anger in Somalia as sons secretly sent to serve in Eritrea military force
• South Africa regulator awards Eskom additional 6 bln rand revenue
• South Africa top court orders Zuma to appear before enquiry commission
• South Africa to issue covid-19 vaccine storage, distribution tender
• Africa secures 400 mln more covid-19 vaccine doses
• Hundreds of pelicans found dead in Senegal World Heritage site
• Kenya’s economy shrinks in Q3 2020 as covid hits tourism
• Tunisia president office gets letter with suspicious powder: source
• Uganda conducting clinical trials of possible drug against covid-19 infections – statement

Bloomberg
• Shell is back in court for Nigeria oil spills liability ruling
• AstraZeneca test results on South Africa variant due next week
• Covid variant fueled record infections in Africa, WHO says
• South Africa covid variant detected for the first time in US
• Nigeria central bank to start commodity exchange in 90 days
• Coronavirus variant from South Africa detected in US for first time
• Ethiopia moves artillery to Sudan border after deadly clashes
• Banks ordered to slash costs, placing Tanzania jobs at risk
• Africa covid vaccination plan to cost as much as $15 bln
• Uganda steps up virus response with vaccines, increased testing
• Nigeria manufacturers list dollar shortage as top challenge
• Zimbabwe miners say FX rule could trigger crisis
• Nigeria seen devaluing naira by as much as 10% in 2021, survey shows
• Mobile power ships eye Africa as virus stalls land projects
• South Africa court rules Zuma must testify at graft inquiry
• Deaths from South Africa’s covid-19 resurgence may have peaked
• Swedish fund’s fading Nigeria bet latest sign of foreign exit
• Kenya in first recession since at least 2000 on virus curbs
• Nigeria dependence on central bank money will be hard to cure

N.B. Full stories of above headlines are available on Reuters & Bloomberg

macroafricaintel Daily Brief | 28 Jan

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji, @macroafrica

Global Markets
• GameStop, other retail darlings dented after Reddit group briefly shuts doors
• Biden takes sweeping measures to curb climate change, vows job creation
• Asia shares undone by Wall Street swoon, short seller squeeze
• Global oil demand to rise, boosted by vaccine distribution and economy: WoodMac
• Oil falls on demand fears, strengthening dollar
• Brent down 0.7% at $55.45, WTI down 0.6% at $52.52 (0452GMT)
• Gold falls as safe-haven appeal shifts to dollar
• Spot gold down 0.3% at $1,837.67/oz., futures down 0.6% at $1,833.70 (0308GMT)

Key African events or data releases today
[Posts & comments at my Twitter handles @DrRafiqRaji, @macroafrica]
• Central Bank of Kenya’s Njoroge briefs press on MPC decision
• Fitch briefs on SSA sovereigns & banks credit outlook
• South Africa PPI Dec-20 [fcst. 3.1% yy, prev. 3.0%]
• South Africa’s Ramaphosa speaks at virtual 20th NEPAD symposium
• Kenya’s Uhuru & Raila intensify BBI campaigns; duo take on Ruto as process moves to counties
• South Africa state capture inquiry continues
• Virtual World Economic Forum (24-29 Jan)
• Kenya’s Council of Governors elects new chairman (29 Jan)
• Bank of Ghana MPC meets [fcst. 14.5%, prev. 14.5%] (26-29 Jan & 1 Feb)
• Kenya inflation Jan-21 [fcst. 5.6% yy (1.0% mm), prev. 6.1% (1.0%)] (29 Jan)
• South Africa PSCE Dec-20 [fcst. 3.6% yy, prev. 3.4%] (29 Jan)
• South Africa M3 Dec-20 [fcst. 9.5% yy, prev. 8.2%] (29 Jan)
• Covid-19 updates by authorities across the continent

Key African events or data releases yesterday & early a.m today
Reuters
• Three teens arrested in Denver, US fire that killed 5 Senegal immigrants
• South Africa, hit hard by coronavirus 2nd wave, expects first vaccines Feb. 1
• South Africa’s Ramaphosa urges businesses to contribute financially to Africa’s vaccine rollout
• Former US envoys alarmed by violence and hate speech in Ethiopia
• South Africa Treasury: could cost 20-24 bln rand to vaccinate 40 mln people
• South Africa Airways administrators gets 1.3 bln rand from govt
• South Africa opposition party goes to court to seek vaccine clarity
• South Africa approves AstraZeneca vaccine for emergency use
• Gambia vows to name and shame latest covid-19 quarantine cheats
• Mali says joint military operation with France kills 100 terrorists

Bloomberg
• South Africa’s first vaccine to arrive amid storm of criticism
• Zimbabwe to fund covid-19 vaccines with govt finances
• No food for 100 hours: The state of South Africa health care
• Africa Finance Corp. to more than double lending in virus battle
• Congo govt falls after censure vote in win for president
• South Africa needs big fiscal effort to stabilize debt, IMF says
• Mozambique central bank surprises with 2021’s first rate hike
• South Africa allows use of parasite drug to treat covid patients
• Tanzania president cautions against coronavirus vaccines
• South Africa’s Naspers looking at how to ease dominance of Johannesburg bourse
• Egypt to reopen LNG plant in push to be major European supplier
• West Africa pirates spur ship lines to seek military help
• South Africa stocks slide for 2nd day after IMF cuts growth forecasts
• Vodafone considering options for Ghana in Africa restructuring

N.B. Full stories of above headlines are available on Reuters & Bloomberg