Nigeria’s President continues the sketchy cash transfer project of his predecessor

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Nigeria is resuming the sketchy conditional cash transfer started under President Buhari but no evidence that the database has improved. Meanwhile, Amazon will launch in South Africa in 2024.

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• Belt and road initiative forums masks debt pile up, geopolitical tensions, and stuttering Chinese economy – The BRI forum in Beijing ends today and it is now widely acknowledged that the next 10 years will not be like the last. Three things have happened that makes it improbable that China will continue the same aggressive strategy of the last 10 years. The debt piled up on the back of the initiative has been huge. Geopolitical tensions have emerged around international trade and globalisation. Also, the Chinese economy is weaker than it was before the pandemic. The initiative, focused on Africa, Asia, and Latin America has been one of China and the world’s most comprehensive trade and foreign policy, allowing Chinese companies to build transportation, energy and other infrastructures funded by Chinese development bank loans. 152 countries signed up, with Italy the only European country to do so. 3,000 projects at different stages of completion and nearly US $1 trillion investment.

• Nigeria’s President continues the sketchy cash transfer project of his predecessor – Nigeria’s President Bola Ahmed Tinubu has reiterated the administration’s commitment to continue the sketchy and non-transparent conditional cash transfer policy of his predecessor. This time, the government will be providing 15 million households with N25,000 over three months. The overall policy is a combination of the CCT and business grants via National Social Safety Net Expansion Programme. However, critics maintain that there is no evidence that the government has a database of the most vulnerable 15 million households in Nigeria. It thus means that the exercise is inherently discriminatory since some of the most vulnerable will miss out. Also, any form of cash transfer is rooted and riddled with corruption. The CCT was first introduced in 2016 under the social intervention scheme to reduce poverty in Nigeria, but the Nigeria Labour Congress and others have often queried the integrity of the data and process.

• South Africa to overtake Nigeria economy – The three largest economies in Africa – Nigeria, South Africa, and Egypt are stuttering. It came as no surprise that the international Monetary Fund (IMF) has predicted a yoyo ladder position in the coming 48 months. The IMF sees the South African economy as a US $401 billion economy in 2024, compared to Nigeria’s US $395 billion and Egypt’s US $358 billion. The Fund expects that the position will be reversed a year later and return to what is generally accepted to be the long-term trend given Nigeria’s population, underutilised labour, and poor economic structure compared to South Africa. South Africa, the most developed economy on the continent is suffering from low growth and productivity spiral. Nigeria overtook South Africa as the largest economy on the continent after rebasing in 2014 but is experiencing what can be described as the lost decade since 2015. With an economy of over half a US $trillion in 2014, the former President presided over the most callous, reckless, and irresponsible measures to the economic shocks of the last 10 years.

• Amazon to launch in South Africa – Amazon, the America online retail giant says it will launch in South Africa in 2024 as Amazon.co.za. This will be the second African country for which it will launch, after Egypt in 2021, taking over souq.com. Ahead of the launch, the retail giant has opened opportunities for small and local South Africa businesses to register. Economies like South Africa are ripe for global scale in e commerce while in Nigeria, e commerce firms like Konga, Jumia, Payporte, Jiji, Kara, etc. have struggled to scale as expected. According to Geopoll, South Africa’s e commerce grew by 66% in 2020 on the back of Covid – 19 that considerably changed consumer behaviour and increasing digital adoption. Notwithstanding, it is expected that Amazon will raise competition for local e commerce firms like Wish, Takealot, Superbalist, etc.

• Zambia and Ghana wait for debt restructuring deal – The long-awaited debt restructuring deal for Zambia and Ghana is still pending. At the last week IMF and World Bank annual meeting in Marrakech, Morocco, it was widely mentioned that Zambia had finalized a restructuring deal. The expectation was that Ghana will follow. But a week after, there is no confirmation yet. Ghana is the most indebted African country to the IMF while Zambia was the first to default on its debt following the pandemic in 2020. Debt restructuring has become critical for these economies to bring debt burden back to sustainable levels and reducing the impact of heavy dept repayments on fragile socioeconomic environment.

Global

• Greta Thunberg arrested in London – Greta Thunberg, the 20-year-old Swedish environmental activist was arrested in London yesterday. She was part of demonstration at the Energy Intelligence Forum (EIF) holding at the Intercontinental Hotel. The demonstration and arrest is the latest in the increasing spiral of demonstrations and arrest in relation to environmental and climate activism. Environmentalists see the global energy industry as the biggest culprit of global environmental degradation and pollution. Many developed countries have recently started to walk back on their target commitments on reducing global emissions. COP28, the global conference to take stock ahead of the 2030 target to half emissions by 2030 will hold November 30 to December 12 in the UAE.

• Jordan fails to get enough votes – Jim Jordan yesterday failed to get enough votes to become the next Speaker of the House of Representatives. The votes came two weeks after Kevin McCarthy was removed as Speaker of the House of Representatives in the US. Another vote is scheduled for later today. The House has been without a substantive Speaker in two weeks because the Republicans have not been able to reach an agreement / consensus on who becomes the next Speaker. Jim Jordan, the Chair of the House Judiciary Committee will need 217 votes to become speaker. While without a substantive Speaker, legislative business in the House has been paralysed for two weeks. Outstanding issues of legislation include the funding the government to avoid a shut down in about four weeks and any potential aid to Israel following the attack on the country.

• Humanitarian crisis worsens in Gaza – There was escalation of the Israel and Palestinian crisis yesterday after Israel was accused of bombing a hospital killing an estimated 500 people. Over a week now that Israel started retaliation strikes in Gaza and preparing a ground invasion of the city, global concerns have started to shift towards the growing and excruciating humanitarian crisis in the strip. It is estimated that about 500,000 people have been internally displaced, including women, children, and the elderly. The blockage of water, food, and fuel remain. There is also no movement on securing the release of the hostages held by Hamas. The situation in the Gaza – Egypt border remain unclear following uncertainties about the ceasefire preconditions for aid to come in. Meanwhile, clean water, food, fuel, and medical supplies are short in Gaza. President Joe Biden of the US will visit Israel on Wednesday.