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AFRICA MACRO

POLITICAL INTRODUCTION Political risk has subsided in Africa as the era of strongmen dominating the political scene has begun to fade. Most importantly, many of the brutal civil conflicts that were so prevalent in the recent past have ended allowing peace to prevail in much of the continent. Despite these encouraging developments, political risk remains a concern because democracy has yet to take root throughout the entire continent. Only a handful of countries, such as South Africa, Ghana, Botswana, Mali, Namibia and Mauritius are fully functioning multi-party democracies where freedom of speech and the press are protected, the judiciary is independent and the rule of law prevails. Sub-Saharan Africa (SSA) may be on the cusp of entering into a period of political turbulence that could increase political risk in the near-term. However, that turmoil could lower the risk in the medium-term if it results in a more liberal political framework that encourages transparency, reduces corruption, eases burdensome regulations and allows for elections that are not subverted by fraud. The “Arab Spring” has swept away the strongmen who ruled Egypt, Tunisia and Libya for decades. It has also shaken the longstanding regime in Algeria and prompted the King of Morocco to institute reforms that if fully implemented will curb his near absolute authority. The only certainty, however, is that the Islamist parties will garner the largest share of the vote in any election as they are the best organized political force and have the largest political base. This was indeed the case in Tunisia where the moderate Islamic party, Nahda, captured a plurality of the vote for the Constituent Assembly that will write a new constitution. The leader of the party was quick to reassure the public that it did not have an Islamist fundamentalist agenda and would protect civil liberties and not roll back women’s rights. Although there is much skepticism about these pledges, it is hoped that Tunisia will set an example for Egypt and Libya that will result in free and fair elections and coalition governments that will promote economic reforms and respect the rights of women and minorities and not impose fundamentalist Islamic orthodoxy.

POLITICAL AND ECONOMIC OVERVIEW

Senegal and Uganda as people test the limits of their ability to give voice to their discontent. In terms of political risk in 2012, there will be several elections, including in Senegal, the Democratic Republic of the Congo, Gambia, Burkina Faso, Algeria, Kenya and Angola. Most of these nations are not known for conducting “clean” elections, and, therefore, the political risk in these countries should be monitored. The last Presidential election in Kenya in 2007 for example was so fraudulent that it was the spark that ignited savage tribal violence that resulted in the death of about 800 people and the displacement of 600,000 people. Another fraudulent result in next year’s upcoming elections could set off an even more violent conflagration that would severely tarnish Kenya’s image in the world, weaken its diverse economy and damage the tourist industry, which is a major source of foreign exchange earnings and employment. Hopefully, this will not happen and the Kenyan election will follow the precedent of the recent approval by the public of the new constitution in a referendum that was deemed fair, free and “clean.” There is much anger over the prevailing poor global economic conditions and the inability of politicians to put a halt to rising unemployment and financial insecurity. The Arab Spring is one manifestation of that discontent. This discontent can be seen in the streets from India Wall Street where it is cause for many to question the established political order. SSA is likely to be touched by the tsunami of discontent that is swirling around the globe. But if this discontent is positively channeled and results in a more liberal political regime that will usher in the rule of law, an independent judiciary, end the tyranny of long serving regimes and reduce corruption, it will be a positive development that will enable Africa to have a more stable and prosperous future.

The Arab Spring has clearly had an impact on the rest of Africa, which is increasingly plugged into the global information network via cell phones, the internet, satellite television, and social media. The people of SSA have seen how “people power” has displaced regimes that once appeared to be impregnable. Many African nations suffer from the same ills which afflicted the countries of North Africa. Youth unemployment is high, corruption is rampant, there is a great deal of income and wealth inequality, and political systems are not responsive to the needs of the people. There have been stirrings in Malawi, Joab’s Technologies and Research, Natu Court Flat B.

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Equity Research in Africa, Like an Electric Train Africa is picking up, a True Emerging Market  

Economic analysis of Africa as a whole, as well as of particular countries and sectors, with special regard to their potential as investment...

Equity Research in Africa, Like an Electric Train Africa is picking up, a True Emerging Market  

Economic analysis of Africa as a whole, as well as of particular countries and sectors, with special regard to their potential as investment...

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