Country Hotspots – October 2016
Angola’s Oil Woes
Oil accounts for 95% of Angola’s export revenue and two-thirds of their fiscal revenue. The ongoing volatility of crude thus continues to negatively impact the foreign exchange supply of Africa’s second-largest producer of the commodity.
The finance minister, Armando Manuel, who inherited an economy still buoyed by stable oil prices in 2013, was replaced this September by Archer Mangueira, following inflation hitting a 38.2% year-over-year increase in August.
The country continues to try and revive stalled talks of assistance with the International Monetary Fund (IMF).
Nigeria’s Naira Sinking, Not Floating
Nigeria’s Forex reserves continue to fall, having reached a more-than ten-year low of $24.8 billion from $30.3 billion just one year ago. Declining oil prices, coupled with militant attacks on oil pipelines in the Niger Delta region continue to put strain on the country’s primary source of revenue.
Almost immediately following the managed free float of the currency, announced in June, the naira fell to an all-time low of ₦365 to the US dollar in the interbank market, recovering to ₦307 in late September. However, it was still trading at ₦425 on the parallel market going into October.
Zimbabwe’s Dry Spell Continues
As the country’s economy is still stifled by an acute lack of liquidity, Zimbabwean president Robert Mugabe was called upon to resign from his office by President Khana of Botswana.
The Botswanan leader stated that the downward economic spiral Zimbabwe has been trapped in since 2000 is damaging to the entire Southern African region.
Democratic Republic of Congo’s Election Date Difficulties
Violence continues to flare up across the DRC as opposition parties and their supporters express displeasure over the announcement that the December 2016 elections will be delayed.
China Struggles With Global Slowdown
Having fuelled enormous growth by leveraging the benefits of globalisation, China is finding its switch to a consumption-based economy from a focus on exports is being hampered by the current global slowdown.
Chinese expansions in the South China Sea continue to be a potential flashpoint.
Mozambique’s Litany Of Problems
With the opposition party leading a low-level insurgency; a slow-growing commodity-based economy; cuts in government spending further hindering growth; suspended international aid and spending; a 75% drop in the value of the Mozambican metical; and little in the way of Forex reserves, Mozambique’s economic outlook is, to say the least, a challenging one.
A military coup in July was swiftly thwarted and, despite the 3-month state of emergency that was announced in its wake, Turkey has returned to a state of some stability. President Erdogan’s attempts at smoothing over diplomatic relations with Russia are a positive sign but wider tensions in the region necessitate ongoing vigilance.