Next Africa: A wake-up call

Turmoil has put currencies, stocks and bonds under pressure

Read in browser

Welcome to Next Africa, a twice-weekly newsletter on where the continent stands now — and where it's headed. Sign up here to have it delivered to your email. The wild swings in the precious-metals market over recent days highlight the risk to African economies of over-reliance on commodity exports. Stocks, bonds and currencies from South Africa to Zambia came under pressure after prices of gold, silver and platinum plunged, and industrial metals including copper followed suit. The entrance to the Johannesburg Stock Exchange. Photographer: Waldo Swiegers/Bloomberg Johannesburg's benchmark stock index slumped as much as 6% on Monday alone before partially recovering. And while the rand rebounded from its worst drop in 10 months, options traders see significantly increased scope for greater currency volatility, which suggests the turmoil isn't over. South Africa derives more than half of its export earnings from raw materials, mostly platinum. Zambia's kwacha, widely seen as a proxy for copper prices and recently one of the world's best-performing currencies, has weakened sharply since late last week. Citigroup took profits after shorting the dollar against the southern Africa nation's currency, saying it's concerned about the fallout from the selloff of the metal that generates more than 70% of Zambia's export income. Even though metals markets appear to be stabilizing as investors buy into the dip, the upheaval was a wake-up call. African commodity producers have benefited from the spectacular rallies that improved their terms of trade. Gold is still up more than 70% over the past 12 months, while silver has almost tripled and copper has gained over 40%. Yet the volatility shows those windfalls can vanish just as fast as they appear. That's brought home, again, the need to diversify economies and for nations to bank their winnings. — Ray Ndlovu and Robert Brand Key stories and opinion: Gold Bounces With Silver as Dip Buyers Crowd In Following Slump Rand Is Undervalued Even After Year-Long Rally, Survey Shows Copper Pares Losses as Signs of Dip-Buying Emerge in China Stocks Scale Fresh Highs as Metals Bounce Back: Markets Wrap Why Even a Hint of 'Sell America' Rattles Global Markets News Roundup  The leader of South Africa's second-biggest political party plans to step down. John Steenhuisen, who has headed the Democratic Alliance since 2019, won't stand for another term in internal party elections in April, sources say. He has been under pressure to quit amid differences over policy choices within the nation's coalition government. Cape Town Mayor Geordin Hill-Lewis is considering running for the position. Geordin Hill-Lewis, left, and John Steenhuisen. Photographer: Chris Jackson/Getty Images Africa recorded its fastest growth in solar-power installations on record in 2025, driven by a surge in utility-scale projects, and could add more than six times last year's annual generation capacity by 2029, a new industry report shows. The continent built about 4.5 gigawatts of new solar, a 54% jump from 2024, the report by the Global Solar Council said. South Africa led installations with 1.6 gigawatts, followed by Nigeria at 803 megawatts. Washington officials plan to travel to Mauritius this month to discuss a proposed security partnership with the island nation after President Donald Trump criticized a deal relating to a joint US-UK military base. The visit was announced by the Mauritian cabinet a week after Trump reversed course on his support for a UK agreement to return sovereignty of the Chagos islands, which houses the base, to Mauritius. The accord provides for Britain to lease the facility back for 99 years.  The Chagos islands. Photographer: Pictures From History/Universal Images Group/Getty Images The Trump administration's decision to suspend issuing green cards due to concerns that recipients may tap public benefits is unlawful, according to the complaint filed in the Southern District of New York. The freeze on immigrant visas to the citizens of 75 countries, including Nigeria, Ghana, Tanzania and Uganda, violates the Administrative Procedure Act and Immigration and Nationality Act as well as equal protections under the constitution, the lawsuit argues. Ethiopia is set to return to double-digit economic growth after reforms backed by the International Monetary Fund eased foreign-exchange constraints and boosted exports. The Horn of Africa nation expects output to expand 10.2% in the fiscal year through July 7. Under an IMF financing program, Ethiopia has liberalized currency trading, opened up the banking and telecommunications industries to foreign investors, and granted them access to the retail and real-estate sectors. The financial district in Addis Ababa, Ethiopia's capital. Photographer: Amanuel Sileshi/Bloomberg Algerian President Abdelmadjid Tebboune inaugurated a 950-kilometer railway built in collaboration with China that's key to exploiting vast iron-ore deposits in the North African nation. The step gives the green light for the first shipments of ore from the Gara Djebilet mine in the western desert near the Moroccan border — a project mooted for decades. Feraal, a unit of Algeria's state miner Sonarem, and China's Sinosteel are among companies involved in the broader project. Thank you for your responses to our weekly Next Africa Quiz and congratulations (again) to Deon Fourie who was first to correctly identify South Africa as the country that expelled a top Israeli diplomat last week. Chart of the Week Unidentified attackers who staged an assault on Niger's capital last week came dangerously close to a stockpile of uranium removed from French company Orano's mine. Heavy gunfire and explosions were reported near Niamey's Diori Hamani International Airport. The facility is adjacent to an air force base where Agence France-Presse said the concentrated uranium powder, known as yellowcake, had been stored. At least 20 attackers died in the assault, according to Defense Minister Salifou Modi. More From Bloomberg Enjoying Next Africa? You might also like: Businessweek Daily for fresh perspectives on business, economics, politics and tech Markets Daily for what's moving in stocks, bonds, FX and commodities Balance of Power for the latest political news and analysis from around the globe Follow us You received this message because you are subscribed to Bloomberg's Next Africa newsletter. If a friend forwarded you this message, sign up here to get it in your inbox. Unsubscribe Bloomberg.com Contact Us Bloomberg L.P. 731 Lexington Avenue New York, NY 10022 |