Facing continued recession, Nigeria announces plans for diaspora bonds
Nigeria’s economy continues to hobble along, as Bloomberg reports, with the naira, which has already dropped 40 percent since June, “destined to weaken,” and the country near its first full-year recession since 1991. Businesses are turning to the black market where the dollar costs 493 naira—60 percent more than the official rate. On Wednesday, the Nigerian government announced its intention to sell diaspora bonds in order to make up for budget shortfalls caused by low oil prices and attacks on its pipelines. Remittances play a huge role in the Nigerian economy: Members of the diaspora send at least $10 billion back to Nigeria a year—making remittances the second-largest source of foreign exchange receipts (after oil revenue). The government still has steps to take: Only the African Development Bank has confirmed $1 billion in budget support, though Reuters reports that the World Bank and China, among others, are also being consulted.
Research Analyst and Project Coordinator - Africa Growth Initiative
At the same time, Nigeria has asked the Taiwanese representative in Abuja to move its office out of the capital just one day after China announced that it plans to invest $40 billion more in the country. Given Taiwan’s contentious political status, few countries recognize it as a sovereign state, but often (as in Nigeria) Taiwan maintains a relationship on the level of “trade representation.” Officially, the Nigerian government denies a change in this relationship. Given recent diplomatic decisions regarding China across the continent, Quartz Africa posits that China is returning to “checkbook diplomacy” in Africa.
Army mutinies in Côte d’Ivoire
Côte d’Ivoire, sub-Saharan Africa’s fastest-growing economy in 2016, has been lauded for its recent economic progress, as well as its remarkable consolidation of peace following its 2011 post-election civil war, which claimed 3,000 lives. However, on Friday, January 6, a brief yet disconcerting mutiny led by aggrieved soldiers appeared to threaten these political and economic gains. The soldiers—frustrated by their pay and unsuitable living conditions—raided police stations in at least seven cities and large towns and held the country’s defense minister hostage for a time. The mutineers demanded bonuses of $8,000 and a house for each of them. Late on Saturday, President Ouattara reached a deal with the mutineers, agreeing to pay their bonuses. He also fired the heads of the army, police, and gendarmerie. Meanwhile, the ECOWAS Commission issued a statement from Abuja on Monday which called on the military “to maintain law and order, while channeling their grievances through appropriate official channels,” according to the Ghana News Agency in Accra.
Many of the soldiers involved in the mutiny were former rebels who supported President Ouattara in the short civil war that brought him to power. Their demands reportedly relate to promises of payment dating back to the war. This is the country’s second army mutiny in three years.
Tobacco use increases in developing and emerging countries
This week, the National Cancer Institute at the National Institutes of Health, in collaboration with the World Health Organization (WHO), published a monograph on The Economics of Tobacco and Tobacco Control. The paper analyzes existing research and evidence around the topic of tobacco use and existing trends and finds that, on a global scale, tobacco use is on the decline. However, this trend is not reflected in low- and middle-income countries where 80 percent of the world’s 1 billion smokers live. In 2000, the African continent hosted less than 4 percent of the world’s smokers. By 2015, that figure will triple to 12 percent. In Congo and Cameroon, for instance, the percentage of people aged 15 and over who smoke has more than doubled between 2000 and 2015.
The increase in tobacco use has been influenced by countries’ inability to create policies enforcing the WHO Framework Convention on Tobacco Control, which many countries ratified in 2004. According to the WHO, developing countries’ inability to enforce strict anti-tobacco rules stems from a fear of big tobacco companies. Tobacco companies state that an increase in tobacco prices—which the WHO advocates as the most efficient means to curb smoking—would create an increase in smuggling and illicit trade in tobacco. The WHO denies this claim.
With increasing tobacco use in developing and emerging countries, the target set by the WHO member countries of a 30 percent relative reduction in tobacco use by 2025 will not be met.
Foresight Africa 2017 launch
On Thursday, January 12, the Africa Growth Initiative hosted an event at Brookings to launch its annual Foresight Africa report. A panel of Brookings and other Africa experts discussed some of the key trends influencing the continent in 2017, including the spread of transformative technologies, economic diversification, urbanization, and the youth bulge. To learn about these issues and more, check out the Foresight Africa 2017 report and watch the launch event here.