Factional assassinations in Ethiopia, the election of Ghazouani as president of Mauritania, and Zimbabwe’s Zollar as the country’s sole legal tender are actions from June 24 that may emerge to become significant factors impacting geomarket developments in Africa.
Ethiopia: Government forces are pursuing General Asamnew Tsige, accused of orchestrating a coup attempt.
Significance: The killing of four Ethiopian officials, including chief of staff of the National Defense Force General Seare Mekonnen and chief administrator of the Amhara regional state Ambachew Mekonnen, was likely part of a destabilization plot whose aim not limited to the Amhara regional government, of which Asamnew was the head of security, but the Ethiopian federal government of Prime Minister Abiy Ahmed. The reformist prime minister has certainly presided over significant political and economic as well as security sector restructuring during the fifteen months now that he has chaired the Ethiopian ruling party and government. Not all Ethiopians have been pleased with the Abiy-led reforms, and the government has been challenged by persistent internal conflict involving dissent from constituent stakeholders, notably the Amhara and Tigray. The violent incidents highlight the disharmony within the multi-ethnic Ethiopian federation, but will not derail the institutional reforms the government is intending will improve the country’s economic performance and democratic space.
Mauritania: Mohamed Ould El Ghazouani was declared the winner of the country’s presidential election held June 22.
Significance: Securing 52% of the vote, Ghazouani was the ruling Union for the Republic (UPR) party candidate and brought long-standing experience in national security and defense affairs to his candidacy. A smooth transition from outgoing President Mohamed Ould Abdel Aziz provides geopolitical stability and confidence that the country’s emerging economic sectors, especially nascent offshore hydrocarbons exploration, will be supported with policy continuity. While regime continuity is assured, the transition from Aziz to Ghazouani also provides stabilizing reassurance that narrow clan interests have not captured the Mauritanian state.
Zimbabwe: The RTGS dollar is now the country’s sole legal tender.
Significance: Zimbabwe has used a basket of foreign currencies, including the U.S. dollar, the British pound, the Euro, and the South African rand, following the collapse of the Zimbabwe dollar due to hyperinflationary conditions in 2009. The RTGS dollar, popularly called the Zollar, was introduced in early 2019 as a means of solving for local currency requirements, but continuing demand for hard currency, especially the U.S. dollar, for local transactions, and high inflationary pressures has pressed the Emmerson Mnangagwa administration to prioritize re-introducing a meaningful sovereign currency. Ill confidence in the Zimbabwe political economy and uncertain legislative and regulatory reforms will raise popular ire in requiring local transactions be done in the pseudo currency, which the Mnangagwa administration hopes is but a bridge to the full restoration, perhaps by early 2020, of the Zimbabwe dollar.