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South Africa’s rand hits 9-month high as election results trickle in

4 August 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand touched a nine-month high against the dollar and government bonds firmed on Thursday as the smooth running of local government elections and expectations that interest rates in leading economies will remain low boosted sentiment.

At 1104 GMT, the rand traded at 13.7100 per dollar, 1.44 percent firmer from its New York close on Wednesday, its strongest level since Oct 29.

The yield for the benchmark government bond due in 2026 dipped 10.5 basis points to 8.55 percent.

“You can attribute some of the movements to the smooth running of the elections without any major incidence of violence or reports of cheating. On the day (the rand) is outperforming other emerging currencies against the dollar,” ETM market analyst Ricardo Da Camara said.

South Africans cast their votes in local elections on Wednesday and the opposition Democratic Alliance (DA) led in three major cities on Thursday as votes were counted, threatening to deal the biggest electoral blow to the African National Congress (ANC) since the end of apartheid two decades ago.

The ANC – which ended white-minority rule when it swept to power in the country’s first democratic elections in 1994 – held a big lead in the national count.

“It’s not entirely clear that the DA is good and the ANC is bad but the market generally welcomes more contested democracy,” Nomura analyst Peter Attard Montalto said.

Other traders said the rand also got support from investors seeking higher yields after the Bank of England cut interest rates for the first time since 2009 on Thursday, while near-term U.S. rate hike prospects cool.

On the bourse, stocks also gained with Sappi surging more than 7 percent after the paper maker reported an eight-fold jump in quarterly profit as of 1117 GMT.

The blue-chip JSE Top-40 index was up 0.3 percent at 45,671 and the broader All-share index added 0.3 percent to 52,650.

 

(Reporting by Tiisetso Motsoeneng and Olivia Kumwenda-Mtambo; Editing by Ed Cropley and Richard Balmforth)

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Africa gets younger while key leaders age

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

mugabe

The average age of Africans is 19.5 but many of its leaders rank among the world’s oldest.

Africa has the youngest population on earth, but many of the continent’s leaders rank among the world’s oldest.

In Africa, 200 million people are between the ages of 15 and 24 and the population of young people is expected to double by 2045. The average age of Africans is only 19.5.

The youthful population contrasts with many long-standing government leaders who are in their 70s, 80s and 90s.

Zimbabwe president is 92

The oldest is Robert Mugabe of Zimbabwe, who at age 92 is the oldest leader in the world. Mugabe was elected to his seventh term as president in 2013. Second oldest is Beji Caid Essebsi, 89, who was elected president of Tunisia in 2014.

Cameroon’s president Paul Biya is 83. He has been in power as prime minister and then president for 40 years, making him the longest serving leader on the continent.

African leaders in their 70s include Abdelaziz Bouteflika, 79, president of Algeria since 1999; Alpha Condé, 78, president of Guinea since 2010; Manuel Pinto da Costa, 78, president of Sao Tome and Principe since 2011 (and previously from 1975 to 1991); Ellen Johnson Sirleaf, 77, who became president of Liberia in 2006; Peter Mutharika, 75, president of Malawi since 2014; Jacob Zuma, 74, president of South Africa since 2009; and Yoweri Museveni, 71, who has been president of Uganda since 1986.

Average age is 78.5

In 2015, the average age of the ten oldest African leaders was 78.5, compared to 52 years of age for the world’s 10 most developed countries. U.S. President Barack Obama is 54, Chinese president Xi Jinping is 62, German Chancellor Angela Merkel is 61, and Russian President Vladimir Putin is 63.

Many African nations enacted term limits to prevent leaders from staying too long in office, but leaders both younger and older have sidestepped those laws in recent years.

For example, in Rwanda, voters last year extended the potential term of popular president Paul Kagame, 58, until 2034, dispensing with term limits that would have prevented him from running for re-election to a third term in 2017.

In 2005, Ugandan lawmakers changed the constitution, allowing President Yoweri Museveni to seek re-election in 2006 and 2011. Now 71, Museveni was re-elected again this year.

Burundi election protests

In Burundi, the re-election to a third term of president Pierre Nkurunziza, 52, sparked protests by those who said it went against the country’s limit of two five-year terms.

Not all of Africa’s long-serving presidents are old. Joseph Kabila, now 44, has been president of the Democratic Republic of the Congo since 2001, when he took office after the president, his father, was assassinated. Kabila was elected in 2006 and re-elected in 2011.

An election is scheduled in November in the Democratic Republic of the Congo, and term limits could prevent Kabila from running for another term. However, the government has suggested the election may be delayed because of logistical problems, sparking protests as the opposition charges Kabila is maneuvering for another term.

Leadership may be out of touch

David E. Kiwuwa, an associate professor of international studies at Princeton University, said the aging leadership is out of touch as the youth population grows.

“With the burgeoning youthful demography at the bottom, the political top is a disturbingly graying lot,” Kiwuwa said.

He said while some African leaders survive by intimidation, others command the loyalty or even reverence of the public because they have been in office for so long and are seen as “fathers of a nation.”

He said the dominance of aging leaders has prevented younger, more creative leaders from emerging even as Africa’s population has grown younger.

“Why is Africa saddled with leaders who ought to be enjoying their retirement in peace and quiet?” Kiwuwa asked.

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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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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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