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South Africa’s rand slides as President’s speech disappoints

Comments (0) Africa, Latest Updates from Reuters, Politics

JOHANNESBURG (Reuters) – South Africa’s rand weakened on Friday after President Jacob Zuma’s state-of-the-nation address that analysts and economists said did not deal with concerns raised by rating agencies.

By 0645 GMT the rand had slipped 0.7 percent to 15.9100 per dollar, pushed lower by the president’s failure to address investor worries over fiscal policy as well weak mining and manufacturing data.

Bonds also weakened, with the benchmark paper due in 2026 adding 7 basis points to 9.24 percent.

“There was only limited recognition of the current economic malaise with an overplaying of success of past policy targets,” said Peter Attard Montalto, head economist for emerging markets at Nomura International.

Analysts said ratings agencies were keen to hear the president announce a clear plan detailing how South Africa would improve economic growth, predicted at only 0.9 percent in 2016 by the central bank.

On Thursday, data from the statistics agency showed mining production declined 0.3 percent in December, while manufacturing grew slightly in the same month.

“The impact of the commodity price rout has been disastrous for domestic mining industry,” analysts at NKC African Economics said in a note.

“Unfortunately, new Mineral Resources Minister Mosebenzi Zwane offered little in the way of viable relief strategies when he addressed Mining Indaba earlier this week.”

Stocks opened higher, with the JSE Top-40 blue-chip index adding 0.65 percent to 42,324 points in early trade.

 

(Reporting by Mfuneko Toyana; Editing by Biju Dwarakanath)

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Egypt sees World Bank funds arriving soon, eyes more Saudi aid

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

CAIRO (Reuters) – Egypt expects to receive a $1 billion World Bank loan approved in December once outstanding paperwork is finalised and is negotiating to secure more aid from Saudi Arabia, International Cooperation Minister Sahar Nasr said on Thursday.

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 first $1 billion tranche of a three-year, $3 billion loan from the World Bank to support Egypt’s budget was approved by the lender in December and was expected to arrive soon after.

But Egyptian media has questioned whether the money would come as the programme is linked to the government’s economic reform programme, including plans for value-added tax (VAT).

Egypt’s new parliament, which held its first session last month, ratified the vast majority of economic laws passed by presidential decree during the three years in which Egypt did not have a legislative house. But it has yet to ratify the government’s economic plan or the World Bank loan itself.

“We are just working on submitting the required documentation. It is nothing. We are normal. There is nothing (to say) about it,” Nasr told Reuters in a telephone interview.

“We need all the documentation, any law, any decree that we put we have to submit in English … Decrees on subsidies, laws for the establishment of industrial zones, fiscal reforms … I thought I would wait for parliament to ratify everything meanwhile.”

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.

“The whole reform programme will need to be done and not just the VAT being out. We need to have executive regulation in place and be operational,” said Nasr, an ex-World Bank official.

Nasr said a $500 million loan for budget support from the African Development Bank, part of a $1.5 billion three-year programme also signed in December, had been transferred.

Since those loans were approved Egypt has secured multi-billion-dollar aid commitments both from China and Saudi Arabia and signed major investment deals with Russia.

 

MORE SAUDI AID?

Egypt was in talks with Saudi Arabia to secure more aid, Nasr said, declining to give details.

Egypt was also working to iron out the details of a Saudi pledge to invest $8 billion in Egypt but Nasr said she was taking time to approve projects that were ready to go.

Egypt has previously signed preliminary deals on big-ticket investments that were later downsized or delayed.

Nasr said the government was still negotiating the details of a Saudi pledge to provide Egypt with petroleum aid over five years. Egypt signed an initial three-month deal with Riyadh to meet immediate needs while talks were ongoing.

“I wanted to make sure the three months are covered and to give myself time to make an even better deal for a five-year plan,” she said.

Egypt spends roughly $700 million a month on petroleum product imports. While it has benefited from plummeting global oil prices, a forex shortage has made it harder for import-reliant Egypt to finance shipments.

Last month, a BP tanker carrying liquefied natural gas was diverted from Egypt in what traders said was a sign that the currency crisis was jeopardising energy supplies.

BP and the government denied any payment problems and said the shipment was delayed by mutual agreement.

Nasr said the shipment was delayed because Egypt had managed to secure its needs more cheaply elsewhere.

“If we get a better deal at a better rate for this month, we will take the better rate,” she said.

 

(By Lin Noueihed. Editing by Michael Georgy and Alison Williams)

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Tanzania plans to cut deficit but raise spending in 2016/17

Comments (0) Africa, Latest Updates from Reuters, Politics

DAR ES SALAAM (Reuters) – Tanzania plans to lift spending on industrial and infrastructure projects but wants to cut the budget deficit, its finance minister said in an outline of the draft budget for 2016/2017, which will be the first under the new president, John Magufuli.

Finance and Planning Minister Philip Mpango presented the figures in a document outlining budget plans for 2016/17 that was presented to parliament on Monday. The detailed draft budget will not be finalised until closer to July 1.

Growth was expected to rise to 7.2 percent in 2016 from 7.0 percent in 2015, Mpango said in his budget draft, making it one of the fastest growing economies in Africa.

The document is the first indication of spending plans under Magufuli, who was elected in October. The former public works minister promised to improve the African nation’s creaking infrastructure and create more jobs.

Under the plans, spending would rise to 22.99 trillion shillings ($10.6 billion) in 2016/17 from 22.49 trillion shillings, but the deficit would shrink to the equivalent of less than 3 percent of gross domestic product from 4.2 percent.

Mpango said the government would hike government revenue collection and find savings through some austerity measures.

Magufuli began his presidency with a series of high profile moves to slash wasteful government spending, such as scrapping official functions, and reining in corruption.

The finance minister said the government would borrow the equivalent of 1.78 trillion shillings, now worth roughly $817 million, from external commercial sources during 2016/17.

Mpango said the goal in the medium term was to hit 8 percent growth.

Financial aid and loans from development partners were expected to fall by 9.3 percent to 2.1 trillion shillings in 2016/17, Mpango’s document said.

Inflation was expected to remain in single digits and fall to 6.0 percent by June 2016 and stay between 5 and 8 percent in the medium term, the minister’s guideline document said. Year-on-year inflation edged up to 6.8 percent in December.

Spending would focus on industrial projects, new infrastructure to improve poor roads and a power shortfall, and a project to start gas exports. Tanzania says it has finalised land acquisition for a liquefied natural gas (LNG) plant.

BG Group, being acquired by Royal Dutch Shell, along with Statoil, Exxon Mobil and Ophir Energy plan to build the plant in partnership with the state-run Tanzania Petroleum Development Corporation (TPDC). They aim to start it up in the early 2020s.

 

($1 = 2,180.0000 Tanzanian shillings)

 

(By Fumbuka Ng’wanakilala. Writing by Edmund Blair; Editing by Dominic Evans and Raissa Kasolowsky)

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Chinese President Xi Jinping Tours Middle East

Comments (1) Featured, Middle East, Politics

Xi Jinjpin Middle East

Chinese President Xi Jinping has completed a three-nation tour of the Middle East intended to strengthen political and economic ties with the region

Chinese President Xi Jinping has completed a three-nation tour of the Middle East, as the world’s second-largest economy seeks to strengthen economic and political ties with the region, and promote its status as a rising power to foreign and domestic audiences.

Energy deals in Saudi Arabia

President Xi’s first stop was Saudi Arabia, China’s biggest supplier of crude oil and its biggest trading partner in the MENA region. During the trip, Xi and King Salman bin Abdulaziz signed 14 agreements focused on energy, culture, and industrial cooperation, and pledged to build a comprehensive strategic partnership for better bilateral ties.

Xi also visited the King Abdullah Petroleum Studies and Research Center, a non-profit institution focused on research in energy economics, policy, technology, and the environment. And he attended the opening ceremony of the Aramco Sinopec Refining Company (Yasref), a joint venture between Saudi Aramco and China Petrochemical Corp (SINOPEC). This venture is China’s largest investment in the region, and looks set to continue to be so, as the two companies signed a framework agreement for strategic cooperation estimated to be worth between $1 billion and $1.5 billion.

Stimulating Egypt’s economy

After energy deals in Saudi Arabia, Xi then travelled to Egypt to meet with President Abdel Fattah el-Sisi, where the pair signed a five-year outlining document to advance their relationship. The Chinese president also announced his country’s intent to participate in key Egyptian projects, including the development of the Suez Canal Corridor and the construction of a new administrative ­capital.

Xi also announced a $1 billion financing agreement for Egypt’s central bank and a $700 million loan to the state-owned National Bank of Egypt, as he looks to support Egypt’s path to economic prosperity. In total, officials from the two countries signed 21 deals spanning development, electricity, transportation, and infrastructure. In a joint statement, President Xi said: “The total investments in these projects would be $15 billion. These projects will offer a new impetus to the economic development of Egypt”.

Increasing trade in Iran

Xi Jinping with Iranian President Rouhani

Xi Jinping with Iranian President Rouhani

Finally, Xi visited Iran; a display of even-handedness in the light of tensions between Iran and Saudi Arabia in recent weeks. The visit also landed just days after sanctions against Iran were lifted, following the UN’s announcement that the country had scaled back its nuclear program. China had been one of the six nations involved in negotiations.

Over recent years, China has been the top buyer of Iranian crude oil and Iran’s biggest trade partner, counting for more than a third of its foreign trade. The lifting of the sanctions will secure the future of that business relationship. Iranian officials confirmed that the country was preparing to raise oil production by 500,000 barrels per day. Iranian President Hassan Rouhani hopes to further boost this relationship, hailing a “new chapter” in relations with China and announcing that the two countries will be building stronger economic ties over the next decade. He comments: “We are happy that President Xi visited Iran after the lifting of sanctions. Iran and China have agreed to increase trade to $600 billion in the next 10 years,” he said. The two leaders also signed 17 agreements in areas including energy, trade, industry, environment, technology, politics, security, and cooperation on peaceful nuclear energy.

Showing China’s economic muscle

During his trip, Xi pledged $55 billion in loans and investments to the Middle East region as a whole, including $15 billion designated as special loans for industrial projects in the Middle East, $10 billion for commercial loans to boost cooperation in the energy sector, and another $10 billion as preferential loans. In this show of economic muscle, he also pledged $300 million to boost China-Arab law enforcement cooperation, and committed a final around $20 billion to setting up a common investment fund with Qatar and the United Arab Emirates. Xi also pledged HK$273.4 million in humanitarian aid for Syria, Jordan, Lebanon, Libya, and Yemen.

But while the tour undoubtedly had significant economic consequences, particularly at a time of economic difficulty and plummeting oil prices in the Middle East, it also seems to be part of a broader Chinese strategy intended to strengthen diplomatic ties with the region. During his trip to Egypt, President Xi delivered a speech outlining China’s new Middle East policy, which included making a commitment to building peace and development in the region, and supporting industrialization and stability. This speech followed the publication of China’s first Arab Policy Paper, a “blueprint for China-Arab mutually beneficial cooperation, [which] reiterates the political will of commitment to peace and stability in the Middle East, in order to promote China-Arab relations to a new and higher level.” It signifies that China will no longer be taking a back seat.

The trip is likely also linked to Xi’s “One Belt, One Road” initiative, a rebuilding of the Silk Road trade routes of the Han dynasty. Xi intends to link China and Europe via Central Asia, West Asia, and the Middle East, with the help of Chinese-funded infrastructure.

And with that many interests to protect, it seems China has good reason to invest more time and money in its relations with the Middle East.

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Nigeria, Angola seek World Bank help as oil revenues slide

Comments (1) Africa, Latest Updates from Reuters, Politics

LAGOS/LUANDA (Reuters) – Nigeria and Angola, Africa’s two biggest oil producers, are both in talks with the World Bank about support to help cope with low crude prices, weakening currencies and strained public finances.

Nigeria has held exploratory talks with the World Bank onborrowing to help fund a record budget in 2016 but has notapplied for any emergency loans, Finance Minister Kemi Adeosunsaid on Sunday.

Angola also held talks with the World Bank between Jan.25-29 about securing funding support in a deal that would seeAfrica’s second biggest oil producer implement unspecifiedreforms, the state news agency reported.

The World Bank and other institutions like the InternationalMonetary Fund have recommended that Nigeria and Angola devaluetheir currencies which both trade officially at huge premiumsto the secondary market. Devaluations could form part of loan deals, two bankingsources said on Monday. Nigerian President Muhammadu Buhari isagainst devaluing the naira.

The naira trades at around 197 against the dollarofficially compared to street rates as weak as 305, whileAngola’s kwanza is worth 155/$ but changes hands at morethan 400 against the greenback on the secondary market.

Nigeria is planning to borrow as much as $5 billion to helpfund a budget deficit due to a slump in vital oil revenues, ofwhich $4 billion might come from international institutions andthe rest from Eurobonds, Adeosun had said earlier this month.

“We have held exploratory talks with the World Bank. We havenot applied for emergency loans,” she told Reuters on Sunday.

Borrowing from international institutions such as the WorldBank would be a cost-effective way to raise money to fund theincreased capital expenditure in the 2016 budget, she said.

World Bank spokesman David Theis said the multilateral lender was in discussions with Nigeria to provide Development Policy Operation funding, which can take the form of a loan, grant or credit.

“Our support will be for a program of policy reform,” Theis said in an e-mailed statement, adding that the proposal will be submitted to the World Bank’s board of directors later this year.

The Financial Times had earlier reported that the WestAfrican nation had asked the World Bank and the AfricanDevelopment Bank for $3.5 billion in emergency loans.

In a written statement, Adeosun’s ministry also saidAfrica’s biggest economy was looking at “options” to borrow fromthe African Development Bank and export credit agencies such asChina Exim Bank “due to their concessionary rates of interest”.

Nigeria expects a budget deficit of 3 trillion naira in2016, up from 2.2 trillion naira previously estimated, as aslump in oil revenues has eroded public finances and hit itscurrency.

Oil exporters worldwide are experiencing similar fiscal strains amid surging crude output and slumping demand. The World Bank and International Monetary Fund are now consulting with Azerbaijan regarding its financing needs.

 

(By Alexis Akwagyiram and Herculano Coroado. Additional reporting by David Lawder in Washington; Writing by Joe Brock and Ulf Laessing; Editing by Toby Chopra, Bernard Orr)

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Record 48 candidates to enter presidential elections in Benin

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Benin Presidential Candidates

An unprecedented 48 candidates have applied to compete for the presidency in Benin’s upcoming February elections.

In a record turnout, 48 candidates have applied to run for presidency in the West African country of Benin in February this year. According to their electoral agency, although 52 nomination papers were received, only 48 forms were correctly completed and accepted.

Political analyst Agapit Napoleon reported this is the highest turn out Benin has ever witnessed in a presidential election since military rule ended in 1990 and multi-party politics commenced.

President Thomas Boni Yayi has held office since 2006 but is barred under the constitution from running for a third term. Thus the elections are wide open to new leadership and the nominations have been flooding in.

“I dream of a Benin that smiles and that’s why I invite us to turn resolutely toward a clear future,” said president Yayi to a crowd of 35,000 at Mathieu Kerekou stadium after he assured the nation he would not change the constitution to run again.

Current Prime Minister strong contender

A front runner is expected to be current Prime Minister Lionel Zinsou who has been selected as the ruling party FCBE (Cowrie Forces for an Emerging Benin) main candidate. Zinsou announced at a business conference in London that he was committed to the electoral race and honored that his party had ratified his candidacy.

Zinsou said his manifesto will concentrate on helping informal workers gain full employment and financial support for agriculture. He argued agriculture needs to be made a priority as it accounts for 23% of Benin’s gross domestic product but only 2% of the banking industry’s profits.

Should he be voted in, he claimed a priority policy would be to finance agriculture in Benin, making sure that families don’t have to carry the burden of borrowing money to finance agricultural activities. Zinsou highlighted the poverty trap farmers often got stuck in when only having access to high-interest loans within Benin, a small cotton-producing nation.

Zinsou’s agricultural policies will particularly focus on developing agricultural banks with an emphasis on ensuring credit is available for farmers. In his policy announcement Zinsou stated that building agricultural credit was the cornerstone of building economic success for the vast proportion of farmers in the country.

Critics accuse Zinsou of colonial collaboration

Speculation from critics claim Zinsou, a French-Beninese investment banker has been implanted by the former colonial power France to safeguard economic benefits for the current president Bony Yayi.

However, Zinsou insists he has the backing of other major political parties including Adrien Houngbedji, a PRD lawyer and current head of Benin’s parliament, who came second in the 2011 election. The government has also publically defended Zinsou, emphasizing his full citizenship and criticizing his opponents for utilizing racist tactics to undermine his candidacy.

Big business in the race

Sebastien Ajavon

Sebastien Ajavon

 

 

 

 

 

 

Two of the most influential and wealthy businessmen in Benin have also announced their candidacy to run against each other. Sebastien Ajavon, who acquired a significant fortune in the food industry, is set to run against fellow tycoon Patrice Talon, a cotton mogul. Talon is regarded as the main opponent to President Boni Yayi’s FCBE party.

Ajavon announced to a large crowd of supporters at Mathieu Kerekou stadium on Sunday, January 3rd that he would run as a candidate for all Beninese. He made particular mention that regardless of religion, gender, geographical region or political preferences he would stand for all citizens.

In the past Ajavon has stayed in the background of politics, funding various political parties. In a similar vein Talon has previously offered financial support to president Yayi’s ruling party before switching allegiance to the opposition.

Political analyst Francois Alladji stated that with Ajavon announcing his candidacy it, “pits the two most powerful traders” in Benin directly running against each other.

Opposition coalition split

The opposition coalition named “Unity Makes the Nation” remained split and could not reach a consensus as to their choice of a main candidate. Subsequently Eric Houndele, who acts as vice president in parliament, also dropped his nomination as an independent candidate.

Despite the strong candidacy of Prime Minister Zinsou, seven other members of the current ruling FCBE party have also applied to run against each other.

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South African president Zuma under pressure as economy worsens

Comments (2) Africa, Featured, Politics

Jacob Zuma

Analysts point to potential losses for the African National Congress in upcoming local elections, which could pave the way for Zuma to exit the presidency later this year.

South Africa’s venerable African National Congress party may lose political ground in upcoming municipal elections as economic conditions worsen and controversy swirls around President Jacob Zuma.

As business confidence in the government and popular opinion of Zuma plummet, some are predicting the ANC could pave the way for Zuma to exit the presidency later this year if the local elections go badly.

Zuma’s six-year tenure has been mired by accusations of corruption, policy missteps and controversial appointments that his critics contend have created economic stagnation and stifled investment in South Africa.

Ouster of finance minister sparks protests, while rand plunges

Zuma caused a national uproar in December when he abruptly fired a respected finance minister and then was forced to sack an inexperienced replacement only four days later amid protests and plunging currency rates and capital markets.

The rand dropped to under 16 to the dollar for the first time and the benchmark stock index lost the equivalent of $11 billion after Zuma fired finance minister Nhlanhla Nene and replaced him with parliamentarian David van Rooyen on Dec. 9.

Business leaders protested while thousands of South Africans took to the streets using the slogan “Zuma Must Fall” and demanding that Zuma leave office.

ANC leaders persuaded Zuma to quickly replace van Rooyen and a measure of stability was restored with the appointment of a third finance minister, Pravin Gordhan who had served in that post from 2009 to 2014.

Economy worsens with record drought

South Africa, the most industrialized country on the continent, was under economic pressure well before the latest events. The rand has steadily declined, losing half its worth since Zuma took office in 2009. The economy is stagnant, unemployment is high, and the country is undergoing its worst drought since record keeping began in 1904.

Maize production has dropped by 30 percent and prices on the South Africa Futures Exchange have more than doubled in the past year. While agriculture makes up only a small fraction of South Africa’s gross domestic product, the country will be forced to import food, including as much as $710 million worth of maize, which will result in even higher prices.

Christo Joubert, a price analyst with the National Agricultural Marketing Council, said the council expected prices to increase by as much as 20 percent in 2016. “The drought is hitting everything,” Joubert said.

The higher prices will present further struggles in a nation with an unemployment rate of 30 percent. Also, analysts predict the nation’s economy could stagnate in 2016 for the third straight year, with a growth rate of less than 1 percent.

Support for government declines

ANCBusiness confidence and popular support for the incumbent government have also dropped.

The business community’s confidence dropped to its lowest rate in 20 years, according to the South African Chamber of Commerce and Industry. As the finance upheaval unfolded in December, the chamber’s confidence index declined to 79.3 percent, the lowest level since June 1993.

Meanwhile, even before December’s events, public distrust of the president had reached a record 66 percent, up from 37 percent in 2011. A majority of South Africans believe Zuma ignores the courts and the parliament, according to an Afrobarometer poll released in November.

Municipal elections could be pivotal

The troubled economy and public distrust put in doubt whether the ANC can maintain its grip on power and whether Zuma will serve out his term.

The ANC has won 60 percent of the vote since coming to power with Nelson Mandela two decades ago.

Gary Van Staden, an analyst with NKC African Economics, said the party could lose as much as 10 percentage points of support in local elections between May and August. He said the ANC can expect to lose control in some municipalities, which run parks, libraries, utilities and sanitation.

If the elections go badly for the ANC, some analysts predict the party will try to replace Zuma.

“We look for a cornered ANC machine having the possibility of managing the exit of President Zuma around July,” said Peter Attard Montalto, an analyst at Nomura.

For now, however, the ANC has voiced support for the embattled president. In the annual speech on the January 8 anniversary of the party, Zuma touted the progress the ANC has brought to the country and said the ANC was needed as a unifier.

Meanwhile, several possible candidates to become Zuma’s successor have emerged. Among those mentioned are Zuma’s former wife, Nkosazana Dlamini-Zuma, who heads the African Union Commission; Cyril Ramaphosa, the deputy president; and Baleka Mbete, the ANC national chairwoman and speaker of parliament.

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Mozambique’s Nyusi fires deputy central bank governor

Comments (0) Africa, Latest Updates from Reuters, Politics

MAPUTO (Reuters) – Mozambican President Filipe Nyusi has fired the central bank’s deputy governor António Pinto de Abreu, the president’s office said on Tuesday, without giving a reason.

The sacking of de Abreu, who has been deputy governor of the Bank of Mozambique since Dec. 2010, comes ahead of its annual meeting later this week.

 

(Reporting by Manuel Mucari; Writing by Stella Mapenzauswa; Editing by James Macharia)

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Rwanda tops the UN Human Development Index

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rwanda

The Human Development Index, or HDI, celebrates its 25th anniversary since its induction into economic thought with its report published last month by the United Nations. And notably, this year’s report included a section that evaluated the progress economies have made since 1990- reporting that Rwanda has made the most progress out of all countries in the last 25 years.

This fact is all the more impressive given that its level of development fell during the genocide of 1994. Rwandans can now expect to live almost 32 years longer than in 1990, and spend twice as long at school.

China, the frequently lauded growth powerhouse of the world, comes in at number two.

Kagame’s Rwanda

Rwanda’s ability to move from the recovery of genocide towards a service-dominated economy in one generation highlights the impact proper governance can achieve in lower income economies. Rwanda has one of the lowest corruption rates in the region, and is currently still led by Paul Kagame, the man who led the Rwandan Patriotic Front when the armed wing of the party ended the Rwandan genocide in 1994.

Currently, Kagame’s presidency is attracting local and international debate as the Parliament recently passed a nation-wide referendum concerning limits on Presidential terms. With the new constitutional amendment and overwhelming popularity Kagame holds, it seems that the President is set to lead the country through at least 7 more years of economic development.

Despite his popularity and demonstrated effectiveness as President, the referendum has attracted global criticism from other world powers. Both the U.S. State Department and the European Union have condemned the results of the referendum, calling Kagame to step down and “foster a new generation of leaders in Rwanda.”

The international community largely fears another life-long leader in central Africa, a region that has witnessed many saviors-turned-tyrants in the post-colonial era. Many neighboring nations are still ruled by dictators such as Angola’s José Eduardo dos Santos, Zimbabwe’s Robert Mugabe, or Cameroon’s Paul Biya, men who have held power over these territories for decades.

However, Kagame has expressed disinterest towards becoming a life-long president. At 58 years old, he said, “I don’t think that what we need is an eternal leader.” The results of the referendum coincide with other leaders in the region seeking constitutional term extensions as well (in the Republic of Congo and the Democratic Republic of Congo), and foreign critics’ fears may be largely attributed to what precedent Rwanda’s referendum may set in the region. In neighboring Burundi, President Pierre Nkurunziza’s decision to seek a third term sparked violent protests resulting in over 100 deaths since the announcement.

How does one measure progress?

Most markers of economic progression deal with money: such as gross domestic product or national debt. The HDI paradigm acknowledges something we all know: it’s not all about money. The health of an economy is also expressed in the welfare of its people and how able they are to contribute to this economy.

The index takes into account measures for household income, life expectancy and education into a single development score, which gives a holistic sense of how an economy is doing on a human basis. The report’s philosophy on progress is explained in its introduction, “development is about enlarging people’s choices—focusing broadly on the richness of human lives rather than narrowly on the richness of economies.”

And for once, it’s mostly good news: the fastest progress was seen among low human development countries. Progress on the HDI has been considerable at the country level. For example, Ethiopia increased its HDI value by more than half; Rwanda by nearly half; five countries, including Angola and Zambia, by more than a third; and 23 countries, including Bangladesh, the Democratic Republic of the Congo and Nepal, by more than a fifth.

The five fastest developing countries in the world are Rwanda, China, Iran, Singapore, and Mozambique.

Rwanda’s reforms serve the bottom 50%

Rwanda’s success can be attributed to conscious economic reform geared towards strengthening the ability of the bottom 50% to engage with business and finance. Last year’s reforms boast an astounding reduction in the number of days required to transfer property from 370 to a mere 32, and jumping from a score of 2 to 19 out of 20 on an index that rates the ease and efficiency of obtaining credit according to a World Bank report published in 2015.

In Africa, Asia and Latin America over 30% of surveyed firms reported access to credit as a major constraint to growth. Rwanda’s new credit guarantee scheme enabled the country to become a major exporter of specialty coffee in one year alone. By creating a financial system inclusive to lower-income households, policy makers have allowed for structural transformation and the creation of work among the bottom 50%.

Rwanda sets the bar for highly developed countries

And Rwanda’s structural transformations that allow for creation does not limit itself to expressions of finance. Their Gender Development Index score is almost perfect at 0.957 out of a maximum score of 1. Rwanda, despite being #163 on the HDI Index, in terms of gender equality scores higher than even highly developed countries such as the Republic of Korea, Greece, and the Netherlands.

Even Switzerland, considered as one of the most developed and egalitarian countries in the world, comes in at only 0.950 in comparison to Rwanda’s 0.957. Rwanda is one of only two countries in the world with a female majority in the national parliament.

And put in perspective, Rwanda’s ability to surpass China is more incredible than it seems. As one of the smallest countries in Africa’s mainland, the country is mired by a lack of natural resources. The growth witnessed over the last 25 years is mostly attributed to a surge in the service industry.

Rather that fear the impacts Kagame’s track record may set in Africa, the foreign community would be amiss to ignore the major successes and beneficial precedents he has set as well, demonstrated in the hard numbers published by the UN’s HDI report in December 2015.

In the same month, an overwhelming 98% of Rwandan voters lifted constitutional bans that would allow Kagame to preside over another 3 mandates, meaning that Kagame could be president until 2034. “What is happening is people’s choice,” said Kagame, adding that Rwandans are a people that “have their future in their own hands. Ask people why they want me.” Given the progress highlighted by the UN Report, the answer seems pretty clear.

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The political stalemate in Zanzibar

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zanzibar elections

As talks fail to produce a peaceful solution, the standoff between rival parties has disrupted trade and brought international concern about potential violence.

The government of Zanzibar has announced plans for new elections in February but the opposition, which claims it won a previous vote that the government annulled, is calling for a boycott.

The announcement is the latest development in a nearly three-month political standoff that has disrupted trade in the east African archipelago and prompted international concerns about potential violence.

At the center of the controversy are long-running tensions over the balance of power between Tanzania on the mainland and tiny Zanzibar, which is a semi-autonomous state within the larger nation.

The leading players are Zanzibar President Mohammed Shein of the Chama Cha Mapinduzi political party, which holds power in both Tanzania and Zanzibar, and Maalim Seif Sharif Hamad, secretary general of the Civic United Front, the main opposition party in Zanzibar.

Opposition declared election victory

Hamad, who is also first vice president of Zanzibar, ran against the incumbent Shein in an October 25 election. The day after the vote, the opposition leader claimed victory before the results were officially announced.

Despite strong objections from the opposition and international observers who said the election was valid, the government annulled the election after the Zanzibar Electoral Commission determined there were electoral law violations.

While incumbent Shein and the Chama Cha Mapinduzi party support a new election, Hamad and the opposition party favor completing talks that began after the opposition questioned the legality of Shein staying in office after his term expired in early November.

Despite eight closed-door meetings since the election, negotiators have not come up with an agreement. Those taking part in the former Tanzania mainland president Jakaya Kikwete, former Zanzibar president Abeid Karume, and former Tanzanian president Ali Hassan Mwinyi in addition to Shein and Hamad.

Zanzibar economy suffers

The announcement of a new election comes in the face of international and domestic pressure to end the political impasse, which is hurting Zanzibar’s economy.

Beans, potatoes and tomatoes, which are from mainland Tanzania, have become scarce and increasingly expensive in Zanzibar. Tanzania’s government said mismanagement by traders, poor infrastructure and red tape are to blame, but Zanzibaris fear traders are responding to the political uncertainty.

According to the Bank of Tanzania (pdf), Zanzibar’s imports dropped by nearly half between October and November 2015, from nearly $40 million to $21 million.

At the same time, fears that the stalemate would affect tourism to the islands may have been unfounded. The bank reported that tourist arrivals increased in 2015, with earnings of $73.6 million, up from $55.2 million in 2014, a gain of more than 30 percent.

Maalim Seif Sharif Hamad

Maalim Seif Sharif Hamad, secretary general of the Civic United Front

Stalemate raises fears of radicalization

International observers declared the October election valid and called on the government to announce the results. They cited fears that the political stalemate could contribute to the radicalization of youths in Zanzibar, which is predominantly Muslim.

International observers also questioned the decision to annul the election, saying it appeared the election commission did not have a quorum when it made the findings of election violations. Nicodemus Minde, an election observer and adviser for Norwegian-based policy group International Law and Policy Institute, called the decision to annul “unilateral.”

The Chama Cha Mapinduzi party has long maintained power in Tanzania, while Zanzibar has chafed at what it considers mainland meddling. The opposition Civic United Front has called for full autonomy for Zanzibar.

After gaining independence from the British in 1961, Tanzania was formed in 1964, uniting the mainland Tanganyika state with the Zanzibar (also called Unguja) and Pemba islands.

Long history of political violence

Elections have been marked by clashes between the two parties since the 1990s, and hundreds have died in past elections. A unity government with the Civic United Front as the junior partner was formed in 2010, when Shein was first elected president, to diffuse tensions.

However, there were reports of police intimidation prior to the October election and two homemade bombs exploded in Zanzibar after the election was annulled. A third device was found and safely detonated in Stone Town, a popular tourist area.

In spite of the annulment, the ballots of 500,000 Zanzibar voters were counted in the election for Tanzania’s president. John Magufuli, the candidate of the Chama Cha Mapinduzi, received 58 percent of the total vote of 15 million and has been sworn into office along with Samia Suluhu Hassan, a Zanzibari who became Tanzania’s first female vice president.

New election “inevitable”

Meanwhile, the Zanzibar government said it had budgeted $3.4 million for a new election. Seif Ali Idd, Zanzibar’s second vice president, called a new election “inevitable.”

Idd said the ongoing talks with the opposition were aimed at keeping the peace but did not preclude an election.

Opposition spokesperson Ismail Jussa told supporters to ignore the government announcement, saying the talks should be completed before an election was scheduled.

It was not immediately clear when mediation talks would continue. Before the election announcement, former Nigerian president Goodluck Jonathan had been tapped to lead new talks and he was expected to visit the country early this year.

Renewed violence feared

The talks began after the opposition party raised questions about whether Shein could stay in office as president after his term expired in November. However, the government maintains that the Constitution allows him to remain in office until a successor is sworn in.

Hubertus von Welck, an election observer from the German Friedrich Naumann Foundation, said negotiations must continue to maintain the peace.

“If they cannot come to a diplomatic solution, we might once again see violence and deaths,” von Welck said.

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