The increasing frequency and intensity of protests and associated violence in Ugandan urban centres is a worrying indicator of political instability, coupled with a deteriorating socio-economic outlook towards the next electoral cycle. Meanwhile, the outlook for oil production is indefinitely pushed back as final investment decision is stalled beyond the current timeline.
The lifting of the interest rate cap puts Kenya on a firmer growth trajectory, while improving chances of an IMF standby facility being approved, unlocking massive new loans from development finance institutions. While demand for local currency government debt will shrink, private sector lending will be boosted as banks launch an SME lending campaign.
Botswana’s ruling party has rid itself of the nationalism, protectionism, and cronyism of the previous administration. It will now seek to liberalise the economy, diversify away from mining sector dependence, and boost development of agricultural southern regions.
Zambia’s finance minister is taking firm steps to stabilise the economy and to resume negotiations with the IMF on a credit facility. However, he will face political pressure to maintain spending levels and miss fiscal deficit targets, while a looming power sector collapse may further undermine the country’s already distressed economy.
The government has pledged political reforms and the release of political prisoners to end a post-election crisis that has tarnished Benin’s democratic credentials. However, the opposition has mostly been excluded from the national dialogue and increasingly restrictive measures are being imposed to curb unrest. The deterioration of socio-economic indicators due to a bilateral trade dispute with Nigeria may also stoke political tensions in the lead up to the next election cycle.
Nigerian indefinite border restrictions on official trade with Benin and Niger are another setback to the continent’s free trade efforts, as import bans drive up inflation and stimulate demand for smuggled fuel and rice. Publicly stated motivations for the trade restrictions backed by the IMF do not disclose murkier political and commercial intentions behind the border closures.
The president makes a bold political gamble to force parliament to lift an interest rate cap which has starved private sector lending and is slowing economic growth. His government hopes to persuade the IMF to restore a standby credit facility to protect Kenya’s distressed credit ratings, yet other factors may thwart such a strategy.
Regardless of the outcome of next week’s elections, Botswana faces its most significant political shift in over 50 years. The transition comes just in time as the economy is slowing and pressure is mounting to reform beneficiation policies in the mining sector.
In the most likely scenario, a disparate group of Islamists and social conservatives will unite to elect Tunisia’s new president and form a new coalition government to face off a populist threat. This comes at the same time as the IMF visits the country to review the 2020 budget and critically important external financing plans.
Until Ghana finds ways to export its excess power supply, the country will be unable to fully pay its debts to private suppliers. However, despite mounting payment arrears for independent power producers in Ghana, the government will continue to intervene in the power sector and its fuel distribution to prevent power supply disruptions.
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