3rd August 2023
Rand's Rollercoaster Ride
The South African rand continued its slump on Wednesday, losing 1% against the dollar, amid growing risk-off sentiment driven by global economic growth concerns. The dollar strengthened by 0.7% against major currencies after Fitch's surprise downgrade of the U.S. credit rating. Manufacturing activity contraction in the U.S., Germany, China, and other nations added to the worries. Emerging market currencies, including the rand, faced pressure as investors sought the safety of the dollar. Johannesburg Stock Exchange saw energy and tech stocks dragging shares down, with the all-share index ending 2.75% lower and the Top-40 index closing 2.9% down. South Africa's 2030 government bond yield rose 4 basis points to 10.370%.
Niger Coup Continues
West African regional bloc ECOWAS (Economic Community of West African States
) has sent a delegation to Niger to negotiate with the military junta that seized power last week. The bloc has imposed sanctions and warned of possible military intervention if the elected president is not reinstated within a week. While a military option is on the table, ECOWAS aims for a diplomatic solution. Nigeria has cut power supplies to Niger as fallout from the sanctions begins. The delegation, led by former Nigerian military leader Abdulsalami Abubakar, is working towards restoring democratic governance. The situation remains closely monitored by foreign powers, with some evacuating their citizens.
Senegal's TikTok Tantrum
Senegalese authorities have blocked access to TikTok, extending their crackdown on dissent after dissolving the main opposition party and detaining its leader. The power struggle between Pastef party leader Ousmane Sonko and President Macky Sall has sparked violent demonstrations, tarnishing Senegal's reputation as a stable democracy in West Africa. The move follows a trend of military coups in the region, with Niger witnessing one recently. Senegal's communications minister cited the social network's potential to spread "hateful and subversive messages" as the reason for the ban. However, some residents argue that the ban stifles learning opportunities and hampers online business activities. Sonko faced charges of planning an insurrection and various other offenses on Saturday, leading to his arrest and subsequent detention.
UK Aid Boost for Nigeria
UK Foreign Secretary James Cleverly pledged a £58 million ($73 million) aid package to bolster the country's food security during his inaugural visit to Nigeria. The funding aims to enhance food production and resilience to climate change, with £55 million designated for such projects. Additionally, £2.89 million will support rural communities in improving animal health and adopting cleaner cooking practices to reduce carbon emissions. Part of a £95 million program unveiled at the COP27 climate summit in Egypt last year, the aid package aims to foster a stronger partnership between UK and Nigerian businesses, mutually benefiting both nations.
