Crypto News: Next Africa: Groundhog day

Welcome to Next Africa, a weekly newsletter on where the continent stands now — and where it's headed.

Ghana may be one of Africa's most politically stable countries. That hasn't translated into sound economic management.

For the 17th time since the 1960s, the country is seeking a bailout from the International Monetary Fund, an indictment of its ability to learn from the mistakes that led to overspending and a crashing currency.

Ghanaian Finance Minister Ken Ofori-Atta. Photographer: Gem Atkinson/Bloomberg

This time the profligacy of its government has had severe consequences.

The cedi is the world's worst performing currency tracked by Bloomberg, having lost almost 60% of its value against the dollar this year. Inflation is 40%, its benchmark interest rate is the highest since 2003 and credit ratings on its already junk-rated debt have been downgraded.

Finance Minister Ken Ofori-Atta is at risk of losing his job and the country is asking creditors to forgo 30% of their investment. One remedy proposed to alleviate the pressure is to barter its gold for fuel imports.

"There's no confidence in anyone or anything," said Kobi Annan, an independent analyst who tracks Ghana's economy. "It's going to get worse before it gets slightly better," he said, forecasting as many as three years of pain.

Ghana has been down this road before: Excessive spending on the government wage bill and the implementation of uncosted flagship projects. This time those include free secondary school education and the construction of a costly national cathedral in central Accra.

For investors, it means losses.

"I wouldn't be surprised if next year there's more," Annan said.

— Antony Sguazzin

Click here for this week's most compelling political images, and here to sign up for the global politics newsletter, Balance of Power.

Resignation Risk | The cash-in-a-sofa scandal engulfing Cyril Ramaphosa is threatening to take down more than just the South African president. Hanging in the balance are the fate of his party and his government's reform agenda that was to have kick-started a stagnating economy. Top leaders of the governing party will begin meeting on Friday to discuss an advisory panel's finding that Ramaphosa may have violated the constitution relating to a theft of $580,000 from his game farm, and following suggestions that he will resign as the nation's leader.

Click here to read an explainer on the scandal and here for what investors are saying about his possible resignation.

Ramaphosa outside parliament in Cape Town in November 2021. Photographer: Dwayne Senior/Bloomberg

Half a Century | Equatorial Guinea President Teodoro Obiang Nguema Mbasago secured a landslide election win, extending his 43-year rule of the tiny oil-rich central African nation. Obiang won another seven-year term, said his son, who is also the country's vice president. The 80-year-old Obiang has won more than 90% of the vote in every election held since he seized power from his uncle in 1979, and 80% of the population have known no other leader.

Peace at Risk | Efforts to restore peace in Ethiopia after two years of fighting between government and rebel forces are being undermined by Eritrea, whose troops continue to attack civilians across its southern border, sources say. Eritrean troops and soldiers from Ethiopia's Amhara region who backed Abiy in the war continue to fight on, and the targets set in a peace deal signed on Nov. 3 may not be met, the people said.

Too Much | The depth of the haircuts Zambia is asking creditors to accept is proving an obstacle in debt restructuring talks, according to Denny Kalyalya, the central bank governor of Africa's first pandemic-era sovereign defaulter. The southern African nation needs $8.4 billion in debt relief to stay on track with its IMF program that ends in 2025. That translates into a 49% reduction in the present value of the debt the government is seeking to restructure.

Long Ride | Three men were rescued from the rudder of an oil tanker after spending 11 days crossing the Atlantic Ocean. Spain's coastguard came to their aid after their arrival in the Canary Islands. The men spent nearly two weeks at sea after the Alithini II left Lagos, Nigeria, according to MarineTraffic, a website that tracks shipping.

Men are photographed on an oil tanker anchored in the port of the Canary Islands, Spain. Source: Maritime Safety and Rescue Society

Missed Target | Advances in women's health and childhood well-being in Africa are at risk after antenatal care and immunization services were disrupted during the Covid-19 pandemic, weakening the continent's already-stretched health services, according to the World Health Organization. Only about 65% of births in Africa are attended by skilled health personnel, well below the 2030 target of 90%.

Click here top read an explainer on why East Africa is facing the worst famine in decades.

Data Watch

Ghana raised its benchmark interest rate more than expected to 27%, the highest level in 19 years as it seeks to tame inflation.
Kenyan inflation slowed unexpectedly for the first time in nine months, helped by lower gas and food prices. Consumer prices increased by 9.5% from a year earlier.
Namibia raised its benchmark interest rate by half a percentage point to 6.75%, while Lesotho tracked the move of its neighbor South Africa to take its rate to 7%. Both countries' currencies are pegged to the rand so their policymakers usually track those in Pretoria.
Zimbabwean inflation slowed to 255% in November, remaining the highest rate in the world.

South Africa's unemployment rate declined for a third consecutive quarter even as record power outages disrupted business and weighed on economic output. That helped the official unemployment rate to drop to 32.9% — the third highest of 82 countries tracked by Bloomberg.

Coming up

Dec. 5 PMI releases for South Africa, Uganda, Mozambique, Kenya and Zambia, South Africa hosts a China International Trade Expo
Dec. 6 South Africa economic-growth data for the third quarter, PMI for Ghana
Dec. 7 Mauritius inflation & reserves data for November, South Africa reserves for November, Seychelles inflation data
Dec. 8 Tanzania inflation data for November, South African third-quarter current account, consumer confidence for the fourth quarter & manufacturing data for October

African cuisine is not a new phenomenon in London. West African take-out shops have been part of the fabric of local high streets for decades. They've been the place for dressed-up families or groups of friends to go for meals after church on Sunday or on the way home from a hair salon. They've simultaneously been a gathering spot, a gossip hub, and a reminder of home cooking for London's burgeoning African population. The portions are generous, but the experience was insular, and the food quality wasn't always high enough to attract a wider clientele. In 2013, Nigerian restaurant Enish opened its first location in southeast London, offering well-made versions of such classic dishes as rich, tomato-y jollof rice and suya, or spicy meat skewers. The place began attracting diners from all over London, and a string of locations opened around town. Now, restaurants from all over sub-Saharan Africa have become the most exciting places to eat in town.