Nigeria’s Naira in free fall

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The Naira is on a free fall. The stampede against the currency and flight towards the US $ is something we have not seen since the lost decades of the 1980s and 1990s. At this rate, it is anyone’s guess where the route will stop. The challenge is that the measures required to stop it today are greater than the measures required just a few weeks ago.

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Africa Headlines

• Nigeria’s Naira in free fall – The Nigeria’s Naira is now in what appears an unstoppable free fall. It exchanges for N1,100 to the US $ yesterday on the streets. It was about N750 to the US $ before the reforms and devaluation 14^th of June 2023. The plan after the aggregation of all exchange rate windows was to end the corrupt rationing by the Central Bank of Nigeria and encourage an inflow of portfolio and direct investment. Instead, the dynamics since has led to widespread speculative holding of the US dollar and increasing dollarization in the Nigerian economy. Inflation reached a near 20 year high of 27% in September. The government’s direction towards economic orthodoxy is not the problem. The challenge is the folly assumption that the markets will immediately fix the demand and supply imbalance.

• George Weah and James Boakai set for rerun in Liberia election – President George Weah and his rival James Boakai are set for rerun November 7. At the last count of the October 10^th presidential election, Weah holds a slim lead with 43.79% while Boakai has 43.49% of the votes. The other 18 candidates have less than 3% of the votes, after 98% of the votes have been counted. According to Liberia’s election law, a president can only emerge with a minimum of 50% of the votes, and thus a rerun will hold. The rerun will be a repeat of the 2017 elections with a result of 61.5% and 38.5% for Weah and Boakai, respectively. In that year, the first-round result of 38.4% for Weah shows that he did better in the first round this time, but not as much as Boakai improved on his first round performance then when he got 28.8% of the vote.

• Africa Union condemns Israel after strike on hospital – The African Union has criticized and condemned the Israeli government for the strike on Al – Ahli Baptist Hospital in Gaza on Tuesday, which killed an estimated 500 people. Africa Union Chairperson Moussa Faki Mahamat said in a statement, “There are no words to fully express our condemnation of Israel bombing of a Gaza hospital, killing hundreds of people. Targeting a hospital, considered a safe haven under international humanitarian law, is a war crime. The international community must act now.” This is latest in the fraught history between the Africa Union and Israel. Earlier this year in February, Israel’s senior delegate to the Africa Union summit in Ethiopia was unceremoniously removed. The history is rooted in the divisions during the apartheid in South Africa, arm sales and divisions during the cold war, and religion alliances.

• US seeks to extend AGOA for another 20 years – The US is seeking to extend the Africa Growth and Opportunities Act for another 20 years from 2025. US Senator John Kennedy introduced the AGOA extension bill S.2952 early this month, read on the floor twice and referred to the Senate’s Finance Committee. The US sees an extension of the initiative as key to continuing the contribution to Africa’s growth, development, democracy, and reduction in poverty through trade and to counter the increasing influence of China on the continent. AGOA was first introduced in 2000 during the presidency of the 42^nd President Bill Clinton and extended for another 10 years in 2015. However, there have been significant shifts on the continent since 2000. China’s development initiatives on the continent, especially through the Belt and Road initiative has been remarkable. Africa has also established the Africa Continental Free Trade Area (AfCFTA). The process is expected to be concluded before year end.

Global

• Premier league TV rights set for another record – The English premier league is set for another record of TV rights, following the expiration of the current deal in 2025. It will increase the number of live televised fixtures in the UK from 200 to 270. This is the first rights cycle since 2018, and it expects to secure a significant increase. The current rights are shared between Sky for 128 matches, TNT for 52 matches, and Amazon for 20 matches, per season. Africa TV rights are owned and controlled by SABC Sports for South Africa and Super Sports and Canal+ Afrique for the rest of Sub-Saharan African countries.

• Jordan fails to get enough votes in second round – Jim Jordan yesterday failed to get enough votes in the second round to become the next Speaker of the House of Representatives. There will another vote today. The votes came two weeks after Kevin McCarthy was removed as Speaker of the House of Representatives in the US. 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.

• Blames and counter blames as Humanitarian crisis worsens in Gaza – The US president Joe Biden visited Israel yesterday amidst blames and counter blames on the bombing of a hospital killing an estimated 500 people. Israel went as far as showing data analysis and video evidence that it was not responsible. Nonetheless, global concerns have shifted towards the growing and excruciating humanitarian crisis in the strip. It is estimated that over 3,000 and about 1500 people have been killed in Palestine and Israel, respectively. Also, in Gaza, 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.