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Nigerian lawmakers to question presidency over long-overdue budget

14 April 2016 Comments (0) Africa, Latest Updates from Reuters, Politics

Nigerian President Muhammadu Buhari

ABUJA (Reuters) – Nigerian lawmakers said on Wednesday they planned to hold talks with the presidency over the 2016 budget bill, which has yet to be signed into law by President Muhammadu Buhari after being passed by parliament last month.

The announcement suggests further delays before the legislation takes effect in Africa’s biggest economy and top oil producer, which is going through its worst crisis in years brought on by the slump in global crude prices.

Buhari withdrew his original budget bill in January because of an unrealistic oil price assumption and flaws in the draft. Lawmakers approved an amended proposal last month but only submitted headline figures rather than the whole document to the president’s office.

That prompted Buhari, who is currently in China, to say he would only sign the bill after checking it thoroughly.

Following closed-session talks by lawmakers in the lower house of parliament, a spokesman for politicians in that chamber said media reports about the contents of the budget submitted to the president last week had caused concern.

“We agreed as a chamber, as a House delegated the Speaker to please go ahead and engage the executive to identify the areas of concern,” said House of Representatives spokesman Abdulrazak Namdas.

He said there was particular concern about media reports that a proposed rail project linking the southwestern commercial capital, Lagos, with the eastern city of Calabar had been removed by parliament as part of their amendments.

Namdas said it “was not among the projects submitted by the President to the National Assembly”.

“Our own area of concern is that people say this thing was in the budget and we removed it. That is why we asked our speaker to liaise with the executive,” he said.

Last month Lai Mohammed, the information minister, said there was no rift between the executive and legislature over details of the budget.

 

(By Camillus Eboh. Writing by Alexis Akwagyiram; Editing by Hugh Lawson)

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World Bank set to provide Egypt with first $1 billion of $3 billion loan

13 April 2016 Comments (0) Latest Updates from Reuters, Middle East, Politics

CAIRO (Reuters) – The World Bank will provide the first $1 billion tranche of a $3 billion loan to Egypt after parliament approves the government’s economic programme, World Bank vice president Hafez Ghanem said at a news conference late Tuesday.

Parliament is expected to pass the program in April.

Egypt has been negotiating billions of dollars in aid from various lenders to help revive an economy battered by political upheaval since the 2011 revolt and ease a dollar shortage that has crippled import activity and hampered recovery.

The lender had agreed to provide the first $1 billion in December but is waiting for the government’s economic programme, which outlines the broad strokes of its reform plans, to be passed by parliament.

The government presented a programme to parliament in late March that aimed to reduce the budget deficit while protecting the poor.

The World Bank told Reuters in December that the first tranche was focused on “10 prior actions for policy and institutional reforms” already implemented. The second and third tranches are linked to additional reforms the government plans.

A long-delayed Value Added Tax (VAT) that has yet to be implemented but was included in the government programme was one of the reforms agreed to as part of the first tranche, Ghanem said.

Ghanem said that there would not be specific conditions placed on future tranches but highlighted certain changes the lender would like to see, such as a shift in food subsidy policy away from reduced prices to direct cash transfers for the poor.

Egypt has delayed a number of difficult reforms, from a VAT that would increase government revenues and a civil service law that would trim the country’s public workforce, to an ambitious plan to wean the country off costly energy subsidies that has since been scaled back.

Egypt’s economy is currently growing at around 4.2 percent with a budget deficit of about 11.5 percent, the prime minister said last month.

Saudi Arabia, along with other Gulf oil producers, have pumped billions of dollars, including grants, into Egypt’s flagging economy since the army toppled President Mohamed Mursi of the Muslim Brotherhood in 2013 after mass protests against his rule.

But Egypt has said it would rely less on grants from its neighbours moving forward and would focus instead on attracting foreign investment that could relaunch its dollar starved economy.

Last week it signed an agreement with Saudi Arabia to set up a 60 billion Saudi riyal ($16 billion) investment fund among other investment agreements including an economic free-zone to develop Egypt’s Sinai region.

 

($1 = 3.7488 riyals)

 

(Writing by Eric Knecht; Editing by Toby Chopra)

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Angola to open loan talks with IMF as oil price bites

6 April 2016 Comments (0) Africa, Latest Updates from Reuters, Politics

LUANDA (Reuters) – Angola will begin loan negotiations with the International Monetary Fund (IMF) this month as lower oil prices hammer the finances of Africa’s second-largest crude exporter, the Finance Ministry said on Wednesday.

Angola’s economy has grown rapidly since a 27-year civil war ended in 2002, peaking at 12 percent three years ago, but a sharp drop in oil prices has sapped dollar inflows, dented the kwanza and prompted heavy government borrowing.

Oil output represents 40 percent of gross domestic product and more than 95 percent of foreign exchange revenue. Brent crude traded below $39 a barrel on Wednesday, down more than 30 percent compared with a year ago. [O/R]

“The government of Angola is aware that the high dependence of the oil sector represents vulnerability for the public finances and the economy in an extensive way,” the Finance Ministry said in a statement.

“The government requested the support of the IMF for a supplementary programme … taking account of the decline in the price of petroleum.”

Finance Minister Armando Manuel told Reuters in March that Angola had no plans to approach the IMF for loans.

Angola will work with the IMF to design reforms aimed at improving fiscal discipline, simplifying the tax system and increasing transparency in public finances and the banking sector, as part of loan talks, the ministry statement said.

It added that the focus of its economic diversification efforts will be growing the agriculture, fisheries and mining sectors.

The ministry said the government was also implementing an ambitious programme of fuel subsidy reforms to shore up the country’s finances.

 

(Reporting by Herculano Coroado; Writing by Joe Brock; Editing by Alison Williams)

 

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African Super Sunday: 5 votes in 5 countries

1 April 2016 Comments (0) Africa, Featured, Politics

March 20th marked a large shift in African politics, as 5 countries on the continent voted on key issues.

Citizens of Benin, Niger, Cape Verde, Zanzibar, Senegal, and The Republic of Congo all had the chance to head to the polls last weekend. While some results were as expected, some showed progress towards improved electoral processes.

In Benin, a presidential run-off took place between Prime Minister Lionel Zinsou, and businessman Patrice Talon. Both were seeking to replace the incumbent President Yayi Boni, whose second term in office ends on April 6th. Events progressed well from the first round of the campaign in which there were 33 candidates. Benin has shown great progress in electoral process, and was the first country in sub-Saharan African to transition to a multi-party democracy. After the polls, Lionel Zinsou conceded defeat to Patrice Talon. The victory of the businessman shows a push for change in how the people of Benin wish to be governed.

Denis Sassou Nguesso was elected to his third term in office

In the Republic of Congo, Presidential elections were held under the new constitution which removed both age and term limits for those serving as President. Before the polls, opposition parties had denounced the lack of transparency in the electoral process. Adding to the irregularity, the country experienced a government-initiated communications blackout during the voting. The official statement was in order to avoid illegal leaking of election results. As predicted, the incumbent President Denis Sassou Nguesso was elected to his third term in office. President Nguesso has already served in office for over 30 years.

In Niger, a Presidential run-off took place between the incumbent President Mahamadou Issoufou, and Hama Amadou. Tensions were high before the run-off with the opposition party rejecting the results before the election was even held, and the COPA withdrawing from the campaign stating a lack of transparency in the process. Hama Amadou was arrested earlier in the year on charges of baby trafficking, and had been flown to France recently for medical treatment as it was stated that his health rapidly deteriorated while in prison. President Mahamadou took more than 92 percent of the vote.

Zanzibar was set for a re-run of its elections which were held in October 2015. At the time the Civic United Front claimed victory even before the results had come out, however the election was invalidated by Jecha Salim Jecha (the president of the local Electoral Commission) due to what was claimed as massive fraud. The Civic United Front however, claimed that this was a ploy by Chama Cha Mapinduzi to deny it victory. For these reasons, the main opposition party decided to boycott the elections only 2 days before the polls were held. The incumbent President Ali Mohamed Shein of Chama Cha Mapinduzi was re-elected.

Senegal: Yes or No referendum

In Senegal, voters were called to vote on a yes or no referendum. Among the issues the referendum addressed was reducing the term limit for presidential office from seven years to five years. This was seen as a bold move by President Macky Sall, as other African leaders seek to find ways to extend their term limits. The referendum would also afford official recognition to the opposition leader in the constitution, local councils would be give more power, and new rights would be afforded to citizens regarding the environment and land ownership.

Meanwhile on Cape Verde, parliamentary elections were held which saw the Movement for Democracy win an absolute majority. They will replace the African Party for the Independence of Cape Verde which had been in the majority for over 15 years.

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Buhari to check Nigeria budget “ministry by ministry” before signing

1 April 2016 Comments (0) Africa, Latest Updates from Reuters, Politics

ABUJA (Reuters) – Nigeria’s President Muhammadu Buhari will check the 2016 budget bill passed last week “ministry by ministry” before signing it, he said on Thursday, signaling further delays before the legislation takes effect.

The budget for Africa’s top oil producer has been held up for months as Buhari had to withdraw his original bill, which set spending at a record $30 billion, in January, due to an unrealistic oil price assumption and flaws in the draft.

Lawmakers approved an amended bill last week that Buhari has yet to sign as parliament has so far only sent highlights of the new document to his office, a government official told Reuters on Tuesday.

“Some bureaucrats removed what we put in the proposal and replaced it with what they wanted,” Buhari said, according to a statement from his office.

“I have to look at the bill that has been passed … ministry by ministry, to be sure that what has been brought back for me to sign is in line with our original submission.”

On Thursday, the information minister said there was no rift between the executive and legislature on details of the budget. A day earlier, a senior lawmaker said parliament might need another week to work out details of the budget.

Buhari hopes the bill will revive the economy but officials have left open how it would be funded. The government has said it might sell Eurobonds or sign a loan deal with China and the World Bank but no deal has emerged.

Oil revenues, which make up about 70 percent of Nigeria’s income, have slumped, hammering the naira currency, halting development projects and leaving budget funding uncertain.

Nigeria has been trying to restart outdated refineries in Port Harcourt, Warri and Kaduna to end its dependency on costly fuel imports for around 80 percent of its energy needs.

Three of its four state-owned refineries were closed for five months in 2015 due to maintenance issues and vandalism.

On Thursday, the Nigerian National Petroleum Corporation

(NNPC) said it was committed to boosting refining capacity as it opened the technical bid for the location of new refineries within the nation’s existing refineries.

Anibo Kragha, NNPC chief operating officer for refineries, said the open bidding exercise demonstrated the determination of the government and state oil company to increase the country’s refining capacity from 445,000 barrels per day to 650,000.

“The aim is to leverage on the existing facilities to fast track the take-off of the refineries as soon as possible,” he said. NNPC said nine companies submitted bids.

 

($1 = 198.8000 naira)

 

(Reporting by Felix Onuah and Camillus Eboh; Writing by Ulf Laessing and Alexis Akwagyiram; Editing by Tom Heneghan)

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Russia and Morocco Strengthen Ties

26 March 2016 Comments (0) Featured, Middle East, Politics

morocco russia

New strategic agreements between Morocco and Russia

Russia and Morocco are known for their mutual respect concerning diplomacy and economic issues since the late 18th century. The Sultan of Morocco, Mohammed III, and Russian Empress Catherine II exchanged letters in areas of mutual interest, including establishment of commercial ties, and allowing Russian boats to have access to Moroccan shores for fishing. Mohammed III then invited a Russian representative to come to Morocco for further talks.

The relationship between Russia and Morocco underwent an evolution in the 19th century, and Russia established a Consulate in Tangiers in 1897. The Russian diplomat Vasily Romanovich Bakherakht arrived in Morocco in May of 1898. Morocco became the first Arab country that Russia established diplomatic ties with, and remained so until the October Revolution.

In November of 1955, the Kingdom of Morocco became an independent state, and the Soviet Union recognized its independence in July of 1956. Diplomatic ties were re-established in September of 1961. Since that time, the connection between Russia and Morocco has been robust, in spite of many economic and political changes that both countries have experienced in the 20th and 21st centuries.

An increasingly strategic alliance between Morocco and Russia

In the past five to ten years, there have been significant indications leading to increasingly close ties and cooperation between Russia and the Kingdom of Morocco. Their international involvement with the global community has experienced uncertainty echoed in circumstances and events affecting both countries. Economic sanctions placed on Russia and the evolution of debate over the Moroccan Sahara are other factors explaining the increasingly strategic alliance between Morocco and Russia.

Morocco’s stronger inclinations towards relations with Russia have often been pointed out by government officials, either through direct meetings or official statements. In several speeches, King Mohamed VI has officially declared the intentions of Morocco to strengthen cooperation with Russia in trade, tourism, and investment. On July 30, 2014, the 15th anniversary of Mohamed VI’s coronation, the Monarch announced his country’s commitment to advancing stronger bonds with Russia. King Mohamed VI

On Tuesday, March 15th, 2016, King Mohamed VI met with Vladimir Putin at the Kremlin and signed six binding agreements and several memorandums, framework agreements, and protocols that deepen ties between the two countries.

The agreements cover:

– Extradition between Morocco and Russia.

– Air services between the countries.

– Cooperation covering environmental protections and use of natural resources.

– Cooperation on sea fisheries.

– The promotion and reciprocal protection of investments.

– A mutual protection of classified information on military and military-technical matters.

– A Moroccan-Russian declaration on the fight against international terrorism.

The memorandums, framework agreements, and protocols cover an understanding on:

–  Cooperation in the field of energy.

–  Cooperation in geological research and exploration of the subsoil.

–  An understanding between the National Health Security Office of foodstuffs (ONSSA) of the Ministry of Agriculture and Maritime Fishing (Morocco) and the Federal Agency for Veterinary and Phytosanitary Surveillance (Federation Russia) plant health of plants and plant products.

– Joint action programs for 2016-2018 in the field of tourism.

– Cooperation between the Ministry of Endowments and Islamic Affairs of the Kingdom of Morocco and the Central Religious Organization (Shura Council of Muftis of Russia).

– A framework partnership agreement with the National Foundation of Museums and the Museums of the Moscow Kremlin.

– And a protocol for the exchange of information on moving goods and vehicles between Morocco and Russia.

The two countries also stressed the need to strengthen global cooperation combating international terrorism and violent extremism.

The two country’s Declaration on their deeper strategic partnership also called for strengthening the central role of the United Nations in its fight against global terrorism, transnational organized crime, criminal corruption, and other challenges.

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Businessman Patrice Talon elected President of Benin

21 March 2016 Comments (0) Africa, Featured, Politics

Benin’s two-round Presidential election concluded on March 20th with the election of businessman Patrice Talon.

The West-African nation of Benin concluded a peaceful, democratic two-round election on March 20th. Outgoing President Thomas Boni Yayi handpicked his successor, Prime Minister Lionel Zinsou, to run against a former ally turned nemesis, Patrice Talon. This election is notable for several reasons: unlike other African leaders, Boni Yayi did not alter Benin’s constitution in order to remain in power past the two-term limit; Zinsou conceded defeat to Patrice Talon on March 20th after winning the March 6th first-round election, and the election was free from violent protests and uprisings.

Benin’s Landscape

A former French colony, Benin has not followed an easy path to democracy. Despite the challenges of post-colonialism (including a decade-long-stint as a Marxist state, interspersed with bouts of intense unrest and violence), Benin has managed to rise above its neighbors, proving that it is committed to free and fair elections. The fact that President Boni Yayi left power at the end of his two-term appointment is in itself remarkable: many of Benin’s neighbors have struggled to depose rulers who are desperate to cling to power past their time.

Perhaps even more impressive than President Boni Yayi’s peaceful exit is the concession by his chosen successor, Lionel Zinsou. The ruling party candidate and current Prime Minister, Lionel Zinsou faced challenges in his candidacy. Having spent the majority of his life outside of Benin, Zinsou struggled to overcome the perception that he was an outsider in his own country, and that his lack of experience on-the-ground in Benin would hinder his ability to make informed choices for the country. It seemed as though he had proved his worth as a Beninese on March 6th, when he won the first round of elections, but Talon ultimately prevailed.

The Gloves Came Off

Between the first election cycle and the second, Benin’s first-ever presidential debate took place. Talon used this opportunity to outline his vision for Benin, and to launch a litany of personal attacks against Zinsou’s lack of experience in Benin and the likelihood that Zinsou would only continue his predecessor’s policies that had “created a banana republic…[and] become the laughing stock of the world.”

Talon’s platform was centered around his rise to fame and fortune despite his small beginnings. Born in the small coastal town of Ouidah, Talon rose to become a key figure in Beninese business, even bankrolling Boni Yayi’s successful 2006 and 2011 campaigns. Talon’s fortune came through his agricultural business investments, primarily in cotton. After completing his university education in Senegal, Talon moved to France to pursue a career in international business. In 1985, he founded the Inter-Continental Distribution Company (SDI), which provides agricultural inputs like fertilizers and herbicides, to cotton farmers in Benin, Burkina Faso, Togo and other West African nations. Talon profited handsomely from the World Bank driven economic liberalization of the 1990s, winning production and manufacturing licenses for cotton ginning within the country.

A Man Made Through Cotton

It was through cotton that Talon made himself known in politics. Talon formed a relationship with the then-communist-government-owned sugar company, SAVE. Through this connection, communist politicians recognized his potential value as a business ally, and when the country moved to a multi-party state in the 1990s, Talon was able to preserve his friendships within the new government. In 2008, then-President Boni Yayi awarded Talon rights to a total of 15 out Benin’s total 18 cotton ginneries, making the cotton industry a near monopoly.

Boni Yayi

Boni Yayi

Once a close friend an ally of President Boni Yayi, Talon lost favor with the President after being accused of plotting a coup and, later, masterminding a plot to poison the President. Talon fled to France in exile before a Presidential pardon in October, when he returned to Benin, ostensibly in preparation for the election.

The Challenges Ahead

The election of President-elect Talon marks the third truly democratic election in the nation’s turbulent history. Having fought against the odds and being elected to the highest office in the country, Talon has even bigger challenges to face as President.

With his experience in the agricultural and cotton industry, it seems logical that Talon would focus on making these industries sustainable while working to diversify the economy–40% of Benin’s GDP is dependent upon cotton. Talon knows that he has a tough job ahead: he has already voiced his desire to tackle youth unemployment, reduce corruption in politics and business, and improve the health and education for the 10.6 million citizens he now represents.

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Africa 2016 Forum on Investment

17 March 2016 Comments (0) Africa, Featured, Politics

africa 2016 forum

On February 20th and 21st, the Africa 2016 Forum took place at Sharm el-Sheikh, Egypt to address possibilities of investment and cooperation between African nations.

In an effort to boost international and regional trade and investment among African nations, Egypt hosted the Africa 2016 Forum in Sharm el-Sheikh over two days (February 20th-21st), the largest to have taken place in the area. Egyptian president, Abdel Fattah al-Sisi is hoping to strengthen ties with the county’s southern neighbors to fortify Egypt’s own economy while supporting those of their African counterparts and further co-operations, investments and business strategies were discussed at length as well as push the balance of trade to induce a more cultivated economy.

There were 5 African leaders who participated on the panel for the conference: Teodoro Obiang, President of Equatorial Guinea, Hailemariam Desalegn, Prime Minister of Ethiopia, Ali Bongo Ondimba, President of the Gabonese Republic, Muhammadu Buhari, President of Nigeria and Omar al-Bashir President of Sudan.

There was an impressive attendance of government leaders, heads of state, business investors and promoters, as well as heads of international organizations. There were 1500 delegates in total covering a variety of key sectors including energy, ICT, financial services, trade, agribusiness, pharmaceuticals and health.

What This Means for Egypt

With such an impressive turnout, Egypt is able to act as a catalyst for the continent. They have upwards of U.S. $8 Billion invested in Africa already and trade has risen by U.S. $5 billion. Al-Sisi is of course, looking for investment opportunities for Egypt but also to protect itself from the growth going on around them.

Ethiopia is constructing a damn on the Nile River which threatens Egypt’s water security- a resource pertinent to their agricultural economy, and one that, up until now, they were permitted unlimited access. The topic was discussed but the finer details remain unforeseen.

Ambassador Hazem Fahmy, head of the Egyptian Agency of Partnership for Development stated, “We have a lot of catching up to do, this is a start.

Investment Opportunities

The conference also aims to connect the other nations; it had provided at platform for further investment opportunities for countries in the region, the rest of Africa and even internationally. President Sisi is aiming heavily for investment in education; he said “Young people are the focus of economic and legislative reforms that will accelerate investment”, and that “Crossing into the future requires taking into account the advancement of technology and paving the way for generations that have the capability to face current challenges”.

There are large projects in both the public and private sector with huge investment opportunity. The conference itself attracted investors which led to negotiations on business plans and investments throughout the conference. For example, Ahmed Heikal, founder and chairman of Qalaa Holdings discussed the possibilities of investment in the East African Rift Valley Railways and U.S. $3.7 billion refinery project in Egypt. In addition, the Tripartite Free Trade Area and the Suez Canal Hub were topics of discussion. No specific figures were released but agreements in the sectors of health, infrastructure and information technology took place.

Increased communication and co-operation

It is no surprise that the consensus of the Africa 2016 Forum was further unified and shard goals when it comes to looking ahead into Africa’s future. It was agreed that there should be vital focus on human capacity and social development. The President of Equatorial Guinea, Teodoro Obiang Nguema pointed out the importance of integration between African countries, saying it is “the key point for our development”.

The policy makers need to work together with leaders and investors so they can see clearly the steps that need to be taken in order to optimize investment opportunity with current markets.

The African economy is growing and is expected to reach 5% in 2017, according to Akinwumi Ayodeji Adesina, President of the African Development Bank. Ethiopia’s growing economy is within the top 5 in the world and who’s Prime Minister stated at the conference “Today in our globalized world no country can achieve development in isolation”.

The result of the conference will hopefully not only break some of the national barriers and restrictions in Africa but also contribute to Africa’s presence within the Global Economy.

For the closing words, Hazem Fahmy, the Secretary General of the Egyptian Agency of Partnership for Development in the Ministry of Foreign Affairs said “One hand alone cannot clap”, showing the importance of the co-operation of African countries.

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Kenya aims to cut 50 bil shillings from net 2015/16 spending

17 March 2016 Comments (0) Africa, Latest Updates from Reuters, Politics

NAIROBI (Reuters) – Kenya’s Treasury has sent parliament supplementary spending plans for the fiscal year ending in June that introduce net cuts of about 50 billion shillings ($493 million), the finance minister told Reuters on Thursday.

The government had forecast a budget deficit of 8.7 percent of gross domestic product for 2015/16, which unnerved investors. Draft figures released in February showed a revised 2015/16 deficit of 8.1 percent, falling to 6.9 percent in 2016/17.

Finance Minister Henry Rotich said in a short telephone interview that the supplementary figures sent to parliament had increased spending in some areas, such as security, but these were outweighed by cuts elsewhere.

“We are increasing spending in some areas and cutting in others but, overall, cuts are more than increases, so we have a net cut of around 50 billion (shillings),” he said.

President Uhuru Kenyatta’s political coalition dominates parliament and is expected to back the revised numbers.

When the 2015/16 budget was announced last year, expenditure including interest payments was forecast at a little over 2 trillion shillings. The International Monetary Fund has urged the government to narrow the deficit. [nL5N16N0KK]

Rotich said last month that the government would cut net domestic borrowing for 2015/16 by a quarter to 168.2 billion shillings as a result of spending cuts prompted by sluggish revenue collection.

($1 = 101.3500 Kenyan shillings)

 

(Reporting by Duncan Miriri; Editing by Kevin Liffey)

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What do reformist gains in Iran elections mean for business?

4 March 2016 Comments (0) Featured, Middle East, Politics

iran elections

Surprise Iranian election result endorses President Hassan Rouhani’s economic reforms.

On February 26th, Iranians headed to the polls and handed moderates and reformists a surprise victory. The result also signaled the endorsement of President Hassan Rouhani and his more moderate agenda and economic reforms, such as his recently negotiated nuclear deal and his moves to engage with the West.

Iranians were voting to decide who sits in the powerful 88-seat constitutional council, the Assembly of Experts, and the 290-seat Iranian Parliament. The Interior Ministry reported that the final count in the parliamentary elections gave reformists 85 seats and moderate conservatives 73, meaning the two blocks, who put their differences aside to run on the same platform, now hold a 54% majority over hard-liners. Iran’s moderates also won a majority in the Assembly, receiving 52 seats, or a 59% majority, bringing to an end more than a decade of conservative domination. In a vote of confidence, President Hassan Rouhani and one of his leading allies, former President Ali Akbar Hashemi Rafsanjani, also retained their seats, while two prominent hardliners lost theirs.

The main role of the clerical Assembly of Experts is to choose the Supreme Leader, the head of state who sits above the president. Current Supreme Leader, 76-year-old hardliner Ali Khamenei, is reportedly ill, meaning it is likely the Assembly voted in by this election will pick the next Supreme Leader. If a reformer or moderate is elected, Iran could see significant change.

However, although this election gave moderates their most dramatic gains in a decade, there have been arguments that the victory is not as reformist as some claim. The running lists were both heavily pruned by the Guardian Council before the vote, with all but 166 rejected of the 801 individuals who put themselves forward as candidates for the Assembly, and 5,200 of the 12,000 individuals registered to run for the Parliament rejected. Nonetheless, with a 62% turnout, this election will be seen as a blow to hardliners and as evidence of a desire for change.

The economy at the heart of the elections

The economy seems to be at the heart of these election results. Iran has been suffering double-digit unemployment and inflation for much of the past decade. Sanctions have cost the country between 15-20% of GDP. And many of its brightest minds have deserted the economy, as 300,000 Iranians moved abroad between 2009 and 2013. A reformist victory suggests that Iranians have had enough of economic pain and are ready to endorse Rouhani’s economic reforms.

Rouhani intends to strengthen the private sector by tackling corruption, welcoming foreign investors, and developing trade with the West. Indeed, since taking office in 2013, more than 120 foreign business delegations have visited Iran in search of business opportunities. And just last month, February 2016, Chinese President Xi Jinping made a poignant visit to the country to discuss increasing trade and signing several agreements. Rouhani has also travelled to Europe to drum up foreign investment, meeting Matteo Renzi in Rome and Francois Hollande in Paris, where he left with $30 billion in deals. Rouhani has also previously said that he hopes to develop tourism into a $30 billion-a-year industry by 2025.

Several deals have also been negotiated recently. Boeing has been given special clearance to sell to Iran, and General Electric is hoping to be offered the same benefit soon. In January, Iran signed an agreement to buy 118 Airbus jets worth $27 billion. And Iran’s Khodro and France’s Peugeot have signed an agreement to build cars.

His negotiation of the nuclear deal in January which lifted sanctions allowing Iran to once again export oil, was also a very clear message of intent. The country now plans to export an additional 1 million barrels a day this year, low prices or not, which will offer a boost to Iran’s economy. And it is also highly likely that foreign firms will start bidding on Iran’s oil fields, bringing the country more modern techniques.

Rouhani

Rouhani

Comparatively fewer restrictions on economic reforms

Moving forwards, analysts believe that these election results will offer Rouhani comparatively fewer restrictions on economic reforms and in making the country more attractive to foreign firms looking for a piece of the relatively untapped market of 77 million consumers. Analysts expect that Rouhani will find it easier to push through legislative reforms and address issues crucial to the business sector such as the commercial code, labor laws, and stock market regulation. They cite the expectation that hardliners will now focus their diminishing political power on social and cultural conservatism.

Analysts have also commented that the positive public opinion will also be significant. These election results offer a symbol to the rest of the world that Iranians themselves are more favorable towards trade and commerce with the West and America, and that in turn could encourage foreign businesses to make longer-term investments.

Of course, the elections do not leave Rouhani without restrictions. Supreme Leader Ayatollah Ali Khamenei, who is strongly against the expansion of civil liberties and freedoms, will still have the final say on matters of state, and the similarly conservative unelected clerical body, the Guardian Council, will continue to have the power to vet all laws. But it does seem that the winds of change may have begun to blow.

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