The new government faces growing pressure to accelerate land reform and implement its populist campaign pledges of poverty alleviation and infrastructure development, which is putting it on a collision course with the IMF.
Despite its pro-investment rhetoric and pledges towards political and economic reform, Zimbabwe’s government will first need to clear the twin hurdles of elections and debt clearance before attracting meaningful fresh investment.
The new government plans to update antiquated citizenship and land laws, which should strengthen investor property rights but may trigger demonstrations by the opposition, civic groups, and student organisations.
The government will rely on its investment grade credit rating and improving relationships with international partners to boost foreign investment and trade flows, yet there remain structural challenges that may thwart this agenda.
The ad hoc implementation of the new Congolese mining code will be used as political leverage over mining companies and international partners to support President Kabila’s term extension ambitions.
Growing regional rivalries in the Horn are frustrating commercial interests, especially port operations and marine freight agreements in Somalia and Djibouti, with broader spill-over effects for the region.
Land reform has become highly politically motivated and a push towards more expropriatory policies will raise concerns over potential nationalisation of banks and further tax hikes ahead of the 2019 elections.
The nationalisation of the Doraleh port terminal indicates a growing sentiment of economic nationalism and a shift in favour of other preferred development partners away from existing contractual arrangements.
A shift in the balance of political power towards the ethnic Oromo group will be contested by Ethiopia’s Tigray elite, yet would mitigate unrest while exacerbating risk of politically-motivated corruption probes and contract alteration of foreign investments.
Incoming president Cyril Ramaphosa will face a fine political balancing act to avoid alienating his political rivals and satisfying his party’s unaffordable policies, while breathing new confidence into the distressed economy.
- EXX Africa director Robert Besseling moderated a panel on Africa’s commodity rollercoaster at GTR Commodities in Geneva hosted by Global Trade Review (GTR)
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