Editor’s Note: March 22, 2019
Does Africa have a resource nationalism problem?
A total of 30 countries, including 21 major oil, gas and mineral producers, have seen a ‘significant increase’ in resource nationalism risks over the past year, according to a new indexby risk consultancy Verisk Maplecroft.
A third of these countries are in Africa, led by Democratic Republic of Congo (DRC), which is also ranked the world’s riskiest place. Other affected countries include Zambia, Tanzania and Gabon.
The findings appear to validate growing concerns about resource nationalism on the continent. While it’s true that some countries have seen an increase, there is room for nuance.
According to the index Africa has a better scorecard than other developing regions, with most countries classed a medium to low risk. Only three notable mineral exporters – DRC, Tanzania, and Zimbabwe – fall into the high risk category.
There is also no uniform driver of resource nationalism.
Tanzania’s regulatory crackdown is part of president John Magufuli’s populist agenda. In Zambiatax changes have more to do with weak public finances than political ideology, while DRC has argued that existing rules excessively favor miners.
This is not to dismiss the significance of the trend for affected countries. Relations between miners and government’s have significantly deteriorated in places like DRC and Tanzania, threatening jobs and investment.
It’s just not a pan-African problem.
From The Continent
Côte d’Ivoire has cancelled plans to issue Eurobonds in 2019, citing market conditions, having announced plans to sell at least $1bn worth in January. The move comes amid concerns about debt sustainability in a growing number of African countries. More: Reuters
Zimbabwe’s government has reached an agreement to raise wages for the lowest paid public sector workers by 29% to $570 per month. The move should help avoid a threatened strike by civil servants amid the country’s worst economic crisis in a decade. More: Africanews
The Daily Stat
The amount by which power cuts by South Africa’s struggling state-owned utility Eskom could reduce GDP growth in the first quarter of 2019. More: Moneyweb
The Global Perspective
The UN’s World Food Programme has warned that around 1.7m people in Mozambique will require assistance in the aftermath of cyclone Idai. This comes as the official death toll from the storm approaches 500. More: USA Today
Ghana is considering issuing a 50-year bond, following the sale of a heavily oversubscribed $3bn Eurobond sale on Tuesday. This comes despite concerns about the country’s rising debt, with the government spending more than 30% of revenue on debt-servicing. More: Financial Times