The following items from May 10 may emerge to become significant factors impacting geomarket developments in Africa:
Angola: The National Assembly will vote May 22 to approve the government’s revised 2019 budget.
Significance: The 2019 state budget was revised on April 26 to reflect a crude oil reference price that was decreased from $68 per barrel to $55 per barrel. The downward revision of the state budget aims to provide the positive benefit of narrowing the government’s budget deficit while trying to minimize adverse public (and especially intra ruling party) opinion from controversial austerity measures and other political and economic reforms the João Lourenço has sustained.
Burkina Faso: French special forces successfully rescued four foreign national hostages held in captivity in northern Burkina Faso.
Significance: The hostage rescue operation took place during the night of May 9 and secured the release of two French (those kidnapped May 1 while on safari in Benin), one American, and one South Korean civilian. A French rescue operation in the Sahel region is consistent behavior when its citizens or interests are compromised, and would not have been ruled out by Al Qaeda in the Islamic Maghreb and its indigenous proxies. Nor will the successful hostage rescue operation discourage the Al Qaeda franchise from continuing to orchestrate the kidnappings of vulnerable foreigners in the Sahel region, given the value the expatriates represent for ransom payments or prisoner exchanges.
South Africa: The ruling African National Congress continues to hold roughly 57% of the vote in general elections held May 8.
Significance: With over 90% of the vote now counted, the African National Congress remains on track to be reelected to a majority position in parliament. In second place is the Democratic Alliance, which has obtained roughly 21% (down slightly from 22% in 2014). The Economic Freedom Fighters grew their third-place vote share to 10% (up from 6% in 2014). The decline in support for the ruling party (down from 62% in 2014), the decline for the Democratic Alliance, and the growing support for the Economic Freedom Fighters will sustain pressure on the Cyril Ramaphosa administration to comply with African National Congress imperatives to assert state-led solutions for unemployment, dissatisfied socioeconomic livelihoods, and land ownership inequalities.
Tanzania: The government has budgeted roughly $1.1 billion in 2019/2020 to finance the construction of the country’s standard gauge railway project.
Significance: The Tanzanian government is self-financing its national priority development projects, which include not only the standard gauge railway project that is intended to link its coastline with the Great Lakes region of central Africa, but the 2,115 megawatt Stiegler’s Gorge hydroelectric power project, a crude oil pipeline from Uganda, a natural gas pipeline to Uganda, as well as Air Tanzania. Electing to self-finance these priority projects ensures they proceed independent of foreign interests, such as what Kenya experienced when China declined approving $3.5 billion for that country’s standard gauge railway efforts, and regardless the adverse foreign investor sentiment that Tanzania is experiencing.