confidentially speaking
The Africa Confidential Blog
SOUTH AFRICA: As Zuma readies State of the Nation speech, his would-be successors launch their campaigns
Patrick Smith
This week we start in Cape Town, which has temporarily become the
crucible for South Africa's political fights as well
as host to an international mining conference. Then we look at the
warnings about Africa's growing indebtedness, the jitters in Nigeria about
the President's health and we ask whether United States' President Donald
Trump is preparing to back Russia's favoured
rebel general in Libya.
Finally, President José Eduardo dos Santos tells
Angolans that he really is
leaving after the August elections.
SOUTH AFRICA: As Zuma readies State of the Nation speech, his
would-be successors launch their campaigns
The country's big political battles come to Cape Town this week as some
of the world's biggest resource companies descend on the city for the
annual Mining Indaba in search of new deals amid global economic
wobbles.
Nkosazana Dlamini-Zuma, outgoing chairperson of the
African Union Commission, kicked it off yesterday (5 February) at a
church service organised by the Faith Ministry and the Women's League
of the African National Congress which backs her campaign for the
presidency. On Wednesday (8 February), she and former President Thabo
Mbeki are due to talk to a select group of investors in
Cape Town about South Africa's political future. Dlamini-Zuma was one
of Mbeki's most trusted ministers when he ran the government.
Earlier that day, Mmusi Maimane, leader of the
opposition Democratic Alliance, is due to speak to the media, outlining
his 'Rescue mission for a lost generation' which is being billed as an
alternative State of the Nation speech. Also speaking that day will
be Sipho Pityana, chairman of AngloGold mining
and the leader of the Save South Africa campaign, which is calling for
President Jacob Zuma's exit.
Deputy President Cyril Ramaphosa, Dlamini-Zuma's
chief rival for the top job, is to address the Progress Business Forum
in Cape Town on Wednesday as part of his slow-motion election campaign.
In recent weeks, Ramaphosa has become more critical of President Zuma's
leadership of the government and party, which has been shaken by
factional rivalries.
Zuma will be in the headlines on Thursday (9 February), when he makes
his State of the Nation Address in parliament where he is likely to
face a barracking from the opposition Economic Freedom Fighters (EFF).
Indeed the ANC and the EFF seem to be spoiling for a test of strength
on the streets of Cape Town. Zuma's aides have installed huge video
screen on the city's Grand Parade and called the party faithful to a
rally there.
After he finishes his speech in parliament, Zuma is due to address the
rally in what is being seen as a direct appeal to the streets. Security
is likely to be heavy, at least around the President and the party's
top officials. That is unlikely to dissuade the militants of the EFF,
led by Julius Malema, who have made it an annual
ritual to disrupt Zuma's State of the Nation speech.
AFRICA'S DEBTS: Bankers sound alarms on the Mozambique syndrome
After Mozambique missed a
US$60 million interest payment on its $727 million bonds last month,
bankers are trying to work out whether it is a tactical move to press
them to renegotiate or if it presages a deepening financial crisis
across the region. The bonds are now trading on the secondary market
for about half their face value.
But so far the bondholders have refused to renegotiate with Maputo
until it publishes an independent audit of all its secret debts and
reaches a deal with the International Monetary Fund. But the
bondholders may be overtaken by events, such as tougher financial
conditions in several other African economies.
John Ashbourne of London-based Capital Economics
is quoted by Bloomberg News warning about repayment difficulties in
several economies hit by falling prices for their commodity exports.
Bloomberg labelled four countries – Senegal,
Tunisia, Ghana and Zambia
– as higher-risk economies, according to its own financial modelling.
Other economists and banks, such as Standard Chartered and Citi group,
argue that the risks of default are being exaggerated. Although the
ratio of debt to gross domestic product in all these economies has
grown sharply over the past four years, two of the countries – Senegal
and Ghana – are following programmes backed by the International
Monetary Fund while Zambia has reopened negotiations with the Fund.
Perhaps the most vulnerable is Tunisia, given the high level of
political risk it has as a neighbour of war-torn Libya. A string of
terrorist attacks in Tunisia have badly damaged its tourism industry
and youth unemployment is rising sharply despite government public
commitments to economic reform.
Last week Ghana's new Finance Minister Ken Ofori-Atta saw
the power of the markets after he announced that the outgoing
government had left a US$1.6 billion hole in state finances which would
push the country's budget deficit close to 10%, more than double its
target. That pushed the yield on Ghana's 2023 bonds four basis points
to 8.48%.
An IMF delegation is due in Accra this to discuss the country's $918
million programme and is expected to respond to Ofori-Atta's comment
that the terms might require some adjustment. Because it approved the
previous government's management of the programme, the IMF will be
under pressure to offer some concessions to the new government.
NIGERIA: President Buhari's extended
medical leave fuels health rumours
A lack of credible information and a storm of lurid stories on social
media is turning President Muhammadu Buhari's
medical leave in London into a political crisis. Claims that he had
been incapacitated or worse accompanied his departure from Nigeria on
19 January for ten days' leave.
The announcement by the presidency on 5 February that Buhari was
prolonging his leave in London for further tests but without setting a
date for his return, seems to have further fuelled the rumours. The
Presidency insists that Buhari's ailments – without naming them – are
not serious.
That is convincing neither the country's feisty journalists nor the
increasingly influential commentators on social media.
Vice-President Yemi Osinbajo is operating as
acting President until further notice.
LIBYA/UNITED STATES: Will Trump administration join Russia in
backing Khalifa Haftar?
Libya's rumbling conflict offers the Trump administration a
clear choice between supporting the European Union position, backing
Prime Minister Fayez Mustafa al Serraj's government
in Tripoli or siding with the Russian-backed rebel General Khalifa
Haftar.
Meeting in Malta last Friday (3 February),
European leaders reiterated their backing for the shaky Al Serraj
government, which they see as key to the United Nations-backed peace
process in the country. European leaders have also approved a $200 mn.
scheme to pay Libya to build camps to discourage migrants from crossing
the Mediterranean.
Yet Gen. Haftar has been sending envoys to Washington to win backing
for his campaign to win control of the country and crush militant
Islamist groups there. Egypt and United
Arab Emirates are already giving Haftar military support,
and we hear that Russia has found a way around the UN sanctions against
arms shipments to Libyan militias.
If it chose to get behind Haftar, the US government could tilt the
balance in the Libyan war, both militarily and diplomatically. Libyan
activists call that policy 'Syria light'. They regard the new US
government as giving tacit approval of the saturation bombing of
opposition areas by the Damascus government and Russian air force. And
they argue that such a policy would worsen rather than resolve Libya's
civil war.
ANGOLA: No drama exit now possible for President Dos Santos
this year
A quiet announcement from the Presidency in Luanda confirmed that José
Eduardo dos Santos would not seek re-election in this year's polls.
That leaves the field open for his preferred successor, Defence
Minister João Lourenço, to become the flagbearer
for the ruling MPLA. Although Dos Santos publicly endorsed Lourenço, a
former soldier and Russian-trained engineer, as his successor last
December, the mechanics of how that might happen remained unclear.
Now it seems likely that Dos Santos will step down after national
elections planned for August. That will not immediately affect his
family's substantial financial interests and role in the economy: his
daughter Isabel runs the state oil company and his
son Xenu runs the country's sovereign wealth fund.
