No. 51 – 3AMReads: Mozambique and Ivory Persist and Attract Capital | African Development Bank Makes Case for Investing in Africa

Bloomberg: Traders Snap Up Assets of Nation Where Default Is New Normal

I’m not really sure what to make of this article. I wrote a several weeks ago about how I was nervous about hedge funds investing in countries like Mozambique. While the independent audit of the country’s finances seems to have given investors increased confidence in the country, are we certain Mozambique is rounding the corner in being able to make it’s debt payments? I’d hate to see this turn into a situation where investors just have more assets to play with in order to get their money.

Reuters: Ivory Coast says long dated Eurobond raised $1.25 bln, 625 mln euros

Despite the tensions with its military, Ivory Coast continues to attract capital. Good stuff.

African Development Bank: Adesina – Its time to reboot and boost US-Africa Commerce and Investments

The Corporate Council on Africa is hosting is US-Africa Business Summit this week. Is Commerce Secretary Wilbur Ross speaking at the Summit a signal that we’re a few inches closer to seeing the US start to roll out bits of an Africa policy?

 

No. 28 – Three AM Reads: Falling Commodity Prices | Kenyan Regulators Split over Bitcoin | IMF Making the Rounds

Coffee Prices Are Going to Drop 6% This Year, But My Americano Will Still Be $4

The World Bank put out its forecasts for global commodity prices last week, and it expects coffee, cocoa, and tea prices to fall 6%. Ivory Coast’s President Ouattara recently called on the country’s cocoa farmers to increase their output and quality of their beans in light of falling cocoa prices. Apparently, greater-than-expected supply of these commodities is driving the price drop, so I’m not sure how increasing output helps with that. Feel free to send me notes explaining that. Increasing cocoa bean quality could help with competitiveness in a crowded market, but cocoa is such a slow developing crop that expectations for quality to improve in a year is not realistic.

Kenyan Regulators Split on Virtual Currencies  

The Central Bank of Kenya and the Capital Markets Authority don’t agree on the use of virtual currencies like Bitcoin in Kenya. The CBK argues that the unregulated nature of Bitcoin exchanges leaves users vulnerable to losses, while the CMA has left the door open for the regulator and fintech players to feel each other out and determine how to move forward with the potential use of Bitcoin in the country. To be clear, Bitcoin startups like Bitpesa are operating in Kenya, though not without challenges. Last year, the Central Bank of Kenya effectively shut down Bitpesa’s operations by shutting down its bank accounts. Ultimately, both regulators will figure out what to do about virtual currencies. Hopefully, they won’t find themselves flat-footed like they did during the rise of mobile payments platforms.

IMF is Making It’s Rounds – Egypt, then Zambia

The IMF has a team in Egypt currently discussing a $1.7B loan, expected to be disbursed in June. Next up, Zambia is slated to continue talks with the IMF this month for a $1.6B loan. The IMF has been working with Mozambique in dealing with it’s hidden debt issue. In all, there are about 20 African countries that have taken money from the IMF. I look forward to seeing that number decrease significantly over the next decade. We’ll see how realistic of a hope that is.

No. 26 – Three AM Reads Late Edition: Kenya’s Geothermal Energy | Resilient Ivory Coast | Nigeria’s FX Reserves

Kenya Pushes Forward on Geothermal Plans

It’s fantastic seeing Kenya continue to make progress on its Vision 2030 plan to be generating 5000MW of geothermal energy by 2030. I was rooting for these projects back in 2011, so I’m glad they’re not making me look bad.

The groundbreaking for the 158MW Olkaria V geothermal site will bring Kenya’s geothermal capacity up to nearly 700MW upon completion. The country’s 5000MW goal is a ways off, but based on the progress made over these more than 15 years and the projects lined up for drilling like the Menengai field, the country could see that goal come into sight quickly.

Ivory Coast Confident Growth Will Continue

Ivory Coast is one of the more fantastic growth stories on the continent. The country was deep in civil war less than a decade ago with former president Gbagbo barricaded in his home. Today, Ivory Coast weathered the specter of another uprising and continued its push as one of the fastest African economies. Incredible.

Nigeria’s FX Reserves Getting Oxygen

The past couple of years have been rough for Nigeria’s FX reserves as oil prices continued to drop, while Nigeria’s government was operating off a budget that assumed much higher oil prices. This left Nigeria’s FX reserves on the struggle bus as the country pulled all the stops to keep things moving. While the reserves have a ways to go before Nigeria is in a comfortable position, it is an encouraging sign to see the reserves account trending up.

Thursday AM Thoughts

Apologies for missing Tuesday’s post. I’m a bit jumbled on helpful content to post, but here’s some of what’s on my mind.

Alassane Ouattara’s Second Term

Alassane Ouattara stepped into his second and final term as President of Ivory Coast earlier this week. Five years ago, President Ouattara was barricaded in a hotel after Laurent Gbagbo and his supporters refused to step down after an election that didn’t go their way.

Today, Ivory Coast has taken its cocoa production to new heights though it is having to deal with the effects of El Nino and questions about the country’s export policy favoring President Ouattara’s stepson. Important power and transportation infrastructure projects are in the works, and foreign investors are paying ever closer attention to the country. Meanwhile, former president Gbagbo stands trial next month for his role in fomenting violence in the country over several elections. Granted, there has been conversation about President Ouattara’s role in violence while seeking office at several points over the past decade and a half.

I look forward to seeing where President Ouattara takes the country in his second term.

Henry Kissinger and the Cold War Years

I’m in chapter 81 of Niall Ferguson’s biography of Niall Ferguson and this peek into the shaping of foreign policy during the Cold War is amazing. Twenty chapters to go!

Ferguson’s recounting of the Kennedy and Johnson administrations is less than flattering. The Kennedy administration’s corruption in securing the presidential election, hand in three or four assassinations of leaders around the world, and penchant for women is a rather sobering cocktail.

The anecdotes of the Johnson administration’s ignorance of the global players in this fight against communism was pretty shocking. This was a time when the future of so many countries was being shaped by the United States! I’ve had many a chill reading some of the stories.

Also, the recounting of Barry Goldwater and the 1964 Republican Convention was pretty amazing. The narrative seemed so reflective of the narrative around Donald Trump. I don’t know whether that is a fair comparison, but Trump kept coming to mind while reading.

Ferguson makes a pretty convincing argument for Kissinger being an idealist. It is very interesting to see his disgust at the Kennedy administration’s unwillingness at times to thoroughly face itself on the question of nuclear power and take a position. Kissinger’s concept of morality doesn’t seem to be so much concerned with whether one’s morals were good or bad, but that one had taken the time to think and take a position no matter how ugly that position may be. I’m still wrapping my head around this, but it is interesting to consider.