Showing posts with label The Economist. Show all posts
Showing posts with label The Economist. Show all posts

Wednesday, January 14, 2015

The twilight of the resource curse?

The twilight of the resource curse?

Africa’s growth is being powered by things other than commodities

FOR decades commodity prices have shaped Africa’s economic growth. The continent is home to a third of the planet’s mineral reserves, a tenth of the oil and it produces two-thirds of the diamonds. Little wonder then that, as a rule, when prices for natural resources and export crops have been high, growth has been good; when they have dipped, so has the continent’s economy (see chart 1).
Over the past decade Africa was among the world’s fastest-growing continents—its average annual rate was more than 5%—buoyed in part by improved governance and economic reforms. Commodity prices were also high. In previous cycles African economies have crashed when the prices of minerals, oil and other commodities have fallen. In 1998-99, during an oil-price fall, Nigeria’s naira lost 80% of its value. African currencies again took a beating during a period of turmoil in commodity markets in 2009.

Wednesday, December 17, 2014

Kenya and the international court

A

One gone, another to go

The dropping of charges against Kenya’s president may roil politics at home


Supporters of Kenya's President Uhuru Kenyatta, celebrate in Nairobi
WHEN the International Criminal Court (ICC) at The Hague took on Uhuru Kenyatta, accusing him of crimes against humanity, it was meant to prove that it could pursue the most powerful perpetrators of crimes by bringing them to book in a global jurisdictions, if they were beyond the reach of justice in their own countries. So when the case against Kenya’s president in the ICC collapsed on December 5th, the repercussions for both court and country were bound to be far-reaching. The court has taken a big knock. But politics in Kenya may get nastier, too.
The international court’s chief prosecutor, Fatou Bensouda, withdrew the charges against Mr Kenyatta after the ICC’s judges had told her to produce hard evidence enabling the trial finally to begin—or to drop the case, after several previous postponements. In judicial terms, Mr Kenyatta is now in the clear.

Church, state and mosque

IN NIGERIA’S capital, Lagos, the candle-like minarets of the Central Mosque look out over streets and alleyways filled with a plethora of churches and cathedrals. Yet these two Abrahamic religions do not co-exist quite as peacefully in many other parts of Nigeria, which is about half Muslim and half Christian; bouts of violence have broken out periodically since the 1960s, mainly in the northern and central parts of the country, many of which are under Islamic law, or sharia (see map).

With elections scheduled for February 2015, there are growing concerns that these long-standing rivalries may be brought closer to the boil. On December 11th Nigeria’s main opposition party, the All Progressives Congress (APC), selected as its presidential candidate Muhammadu Buhari, a septuagenarian Muslim from the north. He will stand against the incumbent president, Goodluck Jonathan, a Christian southerner, just as he did in 2011. That campaign was among Nigeria’s bloodiest, with more than 800 people killed in sectarian fighting. Some worry that, with both parties playing up religion, there is now potential for even worse bloodshed.

Mr Buhari was the military ruler of Nigeria between 1983 and 1985 before being himself overthrown in a subsequent coup. He has a reputation for incorruptibility and firm discipline (during his time as military ruler, civil servants who arrived late for work were forced to do squat-jumps). However many Christians, who predominate in the south, view his brand of Islam as too strident for their liking.

Worries about the fair treatment of Christians have also been exacerbated by the situation in the northeast, where Boko Haram, a jihadist group, is trying to establish an Islamic state. Instability has killed more than 16,000 people. Many of the victims are Muslim, but the Islamists have also singled out Christians for murder or forced conversion to Islam.

“Bad governance, inefficiency and corruption have stirred up religion to the point that it becomes a defining identity,” says Matthew Kukah, a respected public intellectual and Bishop of the Diocese of Sokoto in northern Nigeria. “The worry is whether [Buhari] has the capacity to rein in the excesses of his supporters, a good number of whom may not possess the reflex for showing tolerance.”

Many Muslims, meanwhile, feel alienated by a president who has failed to narrow deep divides between the more prosperous south and impoverished north. He is also seen as partisan in representing a diverse nation, despite his appointment of a Muslim running mate. In October Mr Jonathan made a “private pilgrimage” to Jerusalem, where he was reported to have visited various Christian and Jewish holy sites but no Muslim ones. “Whether Goodluck likes to hear it or not, he is seen by most Muslim masses in Nigeria as the most pro-Christian president,” Ahmad Gumi, a controversial Muslim cleric, wrote in an open letter earlier this year.

Mr Buhari had thought of choosing a fellow Muslim as his running mate. Instead he picked Yemi Osinbajo, a lawyer and a senior Pastor in the Redeemed Christian Church of God. Mr Buhari has avoided an obvious provocation to Christians. Pray that good sense continues to prevail.

Wednesday, December 3, 2014

Somalia's troubles come south

IN the small hours of December 2nd gunmen snuck up on a group of sleeping quarry workers in Mandera country, close to Kenya’s border with Somalia. They were rounded up and made to lie face-down on the ground. Thirty-four of the men, who make a pitiful living mining and breaking stones, were executed with a bullet to the head; two were beheaded; all were non-Muslims.
Ten days earlier in the same remote part of Kenya gunmen flagged down an early-morning bus. Each passenger was asked to recite a verse from the Koran and to respond to a Muslim greeting. Those who failed were shot in the head. Twenty-eight people, many of them teachers going home for the Christmas holidays, were killed. The Shabab, a militant Somali group affiliated with al-Qaeda which is strengthening its foothold in Kenya, said it carried out both massacres.
The attacks underscore Kenya’s state of dire insecurity and its inability to come to grips with the Shabab, either in the countryside or in key cities. The militant group had already struck the capital in an assault on the Westgate Mall in which at least 67 people were killed in September 2013. But this was merely the most prominent of at least 136 terror attacks that have taken place since 2011, when Kenyan soldiers were sent into Somalia to help push back the Shabab. Most have been small-scale—a grenade tossed at a bus stop or a volley of bullets fired into a church—but the group’s ability to mount more complex attacks seems to be improving.
The Shabab’s focus has shifted somewhat from Somalia, where it has lost control of towns to Kenyan and other forces operating under an African Union banner and where some of its leaders have been killed in American air or drone strikes. In Kenya it is seeking to drive a wedge between already divided Christian and Muslim communities. At Westgate the four gunmen made patchy efforts to separate Muslims and non-Muslims, and in the end killed many of both.

Tuesday, December 2, 2014


The coming African debt crisis


A worrying build-up of borrowing


Africa has the fastest-growing continental economy on the planet. And the thing that has been growing fastest of all is debt—personal, corporate and government. In 2015 Africa and its boosters will start to worry that the debt boom is getting out of hand.

Sovereign bonds issued by some of the world’s most far-out “frontier” economies, often denominated in local currencies, are snapped up by hungry investors from Omaha to Zurich. In 2014 countries like Senegal, Côte d’Ivoire (less than five years after a government-debt default) and Zambia placed bonds worth as much as $1 billion, with all the issues oversubscribed. Kenya’s record-breaking sale of $2 billion in debt was oversubscribed four times over.

These government borrowings are in essence massive bets that the African growth story will continue. More betting will follow before the party finally ends—even Ghana, already deep in debt and with the continent’s worst-performing currency, had no difficulty raising another $1 billion in euro-denominated debt in late 2014. The African borrowing binge, which began in 2007 and has been driven by investors’ hunger for yield in the post-crisis economy, looks likely to carry on until interest rates and investment returns in the rest of the world start to normalise.