Insights Newsletter

A roundup of developments to watch on the continent.

Tinubu’s Bold Gambit

Freshly sworn-in Nigerian President Bola Tinubu began his first day in office, as he promised, by announcing the end to more than four decades of fuel subsidy. That might prove the most momentous decision of his time in power.

The impact was immediate. Pump prices jumped threefold and transportation costs rose in tandem, with the ripples still spreading through the wider economy like a shock wave.

Tinubu, whose election is being challenged as rigged by his key opponents, appears to have adopted shock and awe as the choice tactic to approach his constituents. He seems to have very few options though. 

His predecessor Muhammadu Buhari met a national debt of 12 trillion naira when he took office in 2015. Meeting a slump in the price of oil, Nigeria’s main export, Buhari relied mainly on borrowing to fund government expenditure during his two tenures, leaving a huge hole of more than 80 trillion naira in the national purse. Virtually all of government revenue is now going toward paying just the interest on these borrowings, an unsustainable situation. 

Tinubu’s best chance of climbing out of this fiscal hole is through improved oil exports. Yet, crude oil flow has continued only in fits and starts, still hamstrung by large-scale oil theft perpetrated by rogue officials and criminal gangs that saw oil output drop to three-decade lows as Buhari lost control of the oil region.

Insecurity in the oil region is only part of a widespread national malaise that only got worse in the Buhari years. Jihadist and other insurgent groups remain active and resilient across the country’s mainly Muslim north. In the southeast, another front opened in the last two years with pro-Biafra separatists increasing their attacks on police and military checkpoints, forcing them off rural areas into garrison towns.

Tinubu’s decision to take on the toughest decision from the start is akin to a strategy of starting a swim first from the deep end, knowing that the waters can only get shallower and less risky as the swimmer pushes forward. But  there’s always the risk of kicking off a storm and being overwhelmed giant waves.

It remains to be seen. When he was in the opposition, Tinubu led a protest, joined by trade unions and civic groups against then President Goodluck Jonathan in 2012. Now as an incumbent, the unions are threatening strikes and protests against Tinubu’s government. Who will blink first? The coming week might tell.

Angola cuts fuel subsidy too

Angola, which rivals Nigeria as Africa’s top oil producer, also cut its subsidy of fuel. But it didn’t go all the way.

The price of gasoline will almost double to 300 kwanza a liter from the former 160 kwanza, according to Economic Coordination Minister Manuel Nunes Jr. Subsidy will be retained on diesel for another two years as well as on gasoline supplies to farmers, taxi drivers and those engaged in fishing. It’s not yet clear how this dichotomy will work in practice.

Like Nigeria, Angola depends on imports of refined petroluem to meet most of its domestic needs. The hope is that savings from the subsidy payments can be channeled to other areas such as education and infrastructure. Nunes Jr. also stressed that fuel subsidy must end if the state-owned refiner, Sonangol, will have a chance of surviving as a viable, commercial entity. 

South Africa’s BRICS-manship

South African President Cyril Rhamaphos is faced with a difficult task of walking a very fine diplomatic line in the country’s efforts to fulfill its obligations by hosting the next meeting of the BRICS group of countries by bringing together the leaders of Brazil, Russia, India, China and South Africa, as the acronym indicates.

The major diplomatic snag for Rhamaphosa is that Russian President Vladimir Putin plans to attend the meeting in August in South Africa. Putin is wanted by the International Criminal Court at The Hague for alleged crimes against humanity, committed in the course of the ongoing Russian invasion of Ukraine. The West, including the U.S. (which has refused to subject itself to the Rome Statue setting up the court) want Putin arrested if he sets foot in South Africa.

It’s an obligation Ramaphosa is loath to honour and has considered ending his country’s membership of the ICC rather than arrest Putin. It not only puts Ramaphosa on the wrong side of the West, it further highlights differences that became obvious with South Africa’s refusal to condemn Russia’s invasion of Ukraine, a source of umbrage in Washington.

All these go back to South Africa’s apartheid years, when Ramaphosa’s African National Congress (ANC) was seen as “terrorist” in the West but got the support of Soviet Russia. Now as South Africa’s ruling party, the ANC remains keen to protect that old friendship with Moscow.

It’s a position that had upset the U.S., with the ambassador to South Africa even accusing Ramaphosa’s government of supplying weapons to Russia.

While ANC’s may have sympathies with Moscow, the economy it inherited after apartheid has its umbilical cord tied to Europe and America, making any form of severance likely very painful and unpopular with the business establishment at home.

The U.S. could end preferential trade terms with South Africa worth billions of dollars, deepening its woes at a time its beleaguered economy could ill afford it. Even a South African court ruled against moves by the government to rid itself of the responsibilities of being a signatory to the ICC Treaty. All these make the choices before Ramaphosa very difficult ones.

Multichoice joins the payments fray

MultiChoice, a South African media company best known for making a success of pay television across Africa, is teaming up with two other firms to form a payments company and join a rapidly growing industry in the continent that has the world’s youngest people.

Moment, as the payments company is known, is owned by Multichoice, Rapyd and General Catalyst. The venture seeks to address the need “for an accessible and reliable payment platform for many small businesses and millions of consumers in Africa,” according to MultiChoice Group’s Chief Executive Officer Calvo Mawela.

It also reflects what is, in his words, “a logical progression” for a company already having to receive monthly payments from “22 million households across 50 countries in Africa.” These payments alone are worth at least $3.5 billion a year and will be the foundation for Moment’s expansion as a payments service across Africa and globally.

The venture partners see great opportunities in Africa for converting the cash payments that currently dominate transactions into digital payments, said Rapyd’s CEO Arit Shtilman, His General Catalyst counterpart, Adam Valkin,  finds excitement in the fact that in “the next 20 years, most of the population growth of the world will be happening in Africa, along with increasing urbanisation.” He sees more of them going online and adopting digital payments.

Africa’s large population of people outside the banking system and unmet needs for financial services have spurred a surge in payments services aided by the digital revolution. Companies such as Paystack and Flutterwave, which originated in Nigeria, quickly became unicorns from offering payments services, and have now expanded their services across Africa and beyond. In Kenya, telecommunications company Safaricom pioneered mobile-phone based payments with its Mpesa service, which has been replicated by phone companies across the continent.

Trouble in Senegal over Sall’s ambitions

Violence erupted in the Senegalese capital Dakar on Thursday after a court sentenced opposition leader Ousmane Sonko to two years imprisonment for rape, a move seen as designed to pave the way for President Macky Sall’s ambition to extend his rule.

Sonko was sentenced in absentia, with the pronouncement ruling him out of next year’s presidential election. At least, 15 people were killed in the protests which continued on Friday.

Sall’s tenure is due to end next year, but he insists a 2016 change to the constitution allows him to seek re-election. His inclination to hang on to power calls to mind the circumstances of his rise as a key opponent of the attempt by his predecessor, Abdoulaye Wade, to perpetuate himself in power. This led to Sall’s 2012 first electoral victory. Only time will tell if Sonko will be his foil.

Markets & Data

Key indicators from leading African markets

South Africa


Close: 7,126.06

Open: 75,783.25

Change: +1.77%

YTD: +13.54%

ZAR-USD: 19.5299

Change: -0.50

Inflation rate: 6.8%

Reserve Bank rate: 8.25%


NGX Index

Close: 55,822.82

Open: 55,808.25

Change: +0.03%

YTD: 11.56%

Naira-USD: 464.67

Change: +0.03%

Inflation rate: 22.22% 

MPC rate: 18.50%


NSE Index

Close: 105.10

Open: 103.69

Change: +1.36%

YTD: -11.83%

KES-USD: 138.6200

Change: +0.08

Inflation rate: 8%

MPC rate: 9.5%



Close: 1,983.88

Open: 1,988.14

Change: -0.21%

YTD: -5.50%

MUR-USD: 45.5761

Change: -0.58

Inflation rate: 8.3%

MPC repo rate: 4.5%


Close: 2,515.36

Open: 2,512.32

Change: +0.16

YTD: +6.77%

GHS-USD: 11.1517

Change: +0.02

Inflation: 41.2%

MPC rate: 29.50

The Week Ahead

June 5: Ghana, Zambia and Ghana to release purchasing managers index for whole economy for May.Whole economy May PMI releases for South Africa, Ghana, 

African CEO’s Forum holds in Abidjan, Ivory Coast.

June 6: Kenya to release purchasing managers index report; South Africa to release first-quarter GDP report

June 7: Ghana inflation, Mauritius and Seychelles to release May inflation data; Mauritius and South Africa to announce May reserves status.

Nigerian trade unions plan to start a general strike to protest higher fuel prices, a first major test for new President Bola Tinubu.

June 8: South Africa to release first-quarter current account as well manufacturing report for April.

Tanzania to release inflation data for May

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