Tuesday, July 2, 2024

Next Africa: A leap of faith

The political deal in South Africa is just a first step

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By forming the country's first national coalition government since the 1990s, South Africa's two biggest political parties have achieved what most people thought impossible. 

They've set aside two decades of animosity, transcended South Africa's poisonous racial politics and agreed to work together for the good of the country alongside a coterie of smaller groups roped into the alliance.

Now they'll need to go a step further and reinvent themselves. 

South African President Cyril Ramaphosa after his reelection in parliament on June 14. Photographer: Dwayne Senior/Bloomberg

Ministers from the African National Congress, having presided over the collapse of everything from power supply to passenger train services — failures that aided in it losing its majority for the first time since 1994 — will need to prove that they can be competent administrators.

Those from the Democratic Alliance must demonstrate they can lead at a national level rather than just reprising their role of acerbic critics.

"Optimists will hope that departmental successes will be the best marketing for a political party," Oxford Economics Africa said in a note to clients. "Pessimists will fear that ideological differences will result in deadlocks and stumbling blocks."

While capital markets initially rallied on news of the pact, after a month of uncertainty following the May 29 vote, it's a situation fraught with pitfalls. 

Many in both parties want the alliance to fail and the two populist groups left out in the cold — the Economic Freedom Fighters and former president Jacob Zuma's uMkhonto weSizwe — seem intent on doing anything they can to unravel it. Already the EFF has said it plans to organize protests. 

Leaders of both the ANC and the DA have taken a leap of faith. The bigger test will be if they can make the alliance last.   

Key stories and opinion:  
Goldman Sees South Africa's 'Fragile' Coalition Spurring Growth 
South Africa's EFF Plans Protests Against Coalition Government 
South Africa's Kganyago Welcomes Finance Minister Reappointment
Who's Who In South African President Ramaphosa's New Cabinet 
A Historic Deal Sets South Africa on a New Path: Justice Malala

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News Roundup

Kenyan President William Ruto defended his decision to deploy the military to quell nationwide protests that left 39 people dead. "I mean, what choice did I have?" Ruto said in a televised roundtable with Kenyan media on Sunday. "I have no blood on my hands." Protesters stormed the National Assembly on June 25 after lawmakers approved the contentious Finance Bill. Ruto initially termed the action treasonous and said he'd deploy the army to prevent further violence, before withdrawing support for the legislation. 

Demonstrators confront Kenyan security forces in Nairobi on June 25. Photographer: Kabir Dhanji/AFP/Getty Images

Female suicide bombers are suspected in a string of attacks that left at least 18 people dead and dozens injured in northeastern Nigeria. The attackers separately targeted a wedding, a funeral and a hospital in the town of Gwoza, close to the border with Cameroon, according to Barkindo Saidu, director general of the Borno State Emergency Management Agency. No group has claimed responsibility for the blasts.      

Mohamed Ould Ghazouani secured a second term as president of Mauritania in Saturday's election as the country prepares to produce its first gas. The victory for Ghazouani, who won 56% of the vote to avoid a run off, is expected to bring policy continuity to investors in the European Union ally. The nation has a share in the giant offshore Grand Tortue Ahmeyim field that straddles its border with Senegal. Biram Dah Abeid, a prominent anti-slavery activist who came second in the 2019 presidential election, received 22% backing.

Mohamed Ould Ghazouani. Photographer: John Wessels/AFP/Getty Images

Billionaire Anil Agarwal's Vedanta is set to regain control of Konkola copper mine and plans to quickly ramp up output as demand for the metal is expected to surge in the coming years. The firm is ready to pay $250 million to settle debts owed by the mine to get access to the asset again, Chris Griffith, who runs the Indian company's base metals unit, said in an interview. Konkola was put into provisional liquidation in 2019 after the previous government accused its owner of lying about expansion plans and paying too little tax.

Ivory Coast's cocoa output is expected to rebound next season — helping ease a global-supply squeeze that pushed prices to new records — as the world's top grower banks on better weather. The West African producer is likely to harvest 2 million tons of the chocolate-making ingredient in the 2024-25 crop year that starts in October, sources say. A mix of bad weather, disease and aging trees in Ivory Coast and Ghana drove this season's slump and saw New York cocoa futures soar. 

Harvested cocoa pods on a farm in Azaguie, Ivory Coast. Photographer: Andrew Caballero-Reynolds/Bloomberg

Democratic Republic of Congo's state-owned miner Gecamines will oppose the sale of Trafigura-backed Chemaf Resources to China's Norin Mining. Chemaf leases the permit for its flagship Mutoshi project from Gecamines, which said in a statement that it has the right to reject the ownership transfer. Chemaf says that Congo's government approved the transaction after a slump in cobalt prices left it struggling to finish key projects and seeking a buyer.

Thank you for your responses to our weekly Next Africa Quiz and congratulations to Joseph Obonyo, who was first to identify ZWG as the global currency code assigned to Zimbabwe's ZiG.

Chart of the Week

Zambia's central bank published plans to criminalize the use of foreign currencies in the local economy, amid the biggest rally in the kwacha in four months. The southern African nation has faced severe currency volatility over the past five years, driving up the cost of imports and fanning inflation, which neared a two and a half year high last month. Companies from car dealers to mall landlords and hotels often charge in dollars, shunning the kwacha.

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