Public Debt in African States

This is from the IMF:

Screen Shot 2018-11-23 at 10.27.45 AMCountries in sub-Saharan Africa accumulated external debt at a faster pace than low- and middle- income countries in other regions in 2017: the combined external debt stock rose 15.5 percent from the previous year to $535 billion. Much of this increase was driven by a sharp rise in borrowing by two of the region’s largest economies, Nigeria and South Africa, where the external debt stock rose 29 percent and 21 percent respectively.

Export growth is not keeping up with rising levels of external debt:

….In 2017, the ratio was largely unchanged from the prior year, at an average of 138 percent. However, this ratio was close to double the average of 70 percent in 2010. Moreover, the average ratio masks wide disparity between countries. At the end of 2017 54 percent of countries in the region had an external debt-to-export ratio over 150 percent, as compared to 28 percent of countries in 2010 and the number of countries where the ratio surpassed 200 percent more than doubled, from 6 countries to 14 countries, over the same period. Most of these countries are ones that benefitted from HIPC and MDRI relief, including Burundi, Ethiopia, Niger, Senegal and Tanzania.

Bond issuance is dominated by a handful of countries:

Bond issuance by sovereign governments and pub- lic-sector entities in the region rose to $27 billion in 2017, a more than fourfold increase over 2016, driven to a large extent by a surge in issuance in South Africa to $19 billion from $4 billion in 2016, 70 percent of bond issuance in the region last year. An important factor was non-resident purchase of bonds issued in the South African domestic market. Bond issuance by other countries in the region totaled $8 billion, a tenfold increase from 2016, reflecting continued investors’ confidence and search for yield. Issuing countries in 2017 were Nigeria ($4.8 billion), Cote d’Ivoire ($2 billion), Senegal ($1.1 billion), and Gabon ($0.2 billion). Nigeria’s $3 billion Eurobond issuance marked the country’s largest such operation to date, and at end 2017, bond issuance accounted for one third of the country’s outstanding external debt.

Overall, while the data suggests that things may not be as bad as they were over the lost long decade (1980-1995), the trends are not encouraging. Total reserves as a share of external debt peaked around 2010 and have been in decline since. Screen Shot 2018-11-23 at 10.54.37 AM

It’s getting easier to do business in Africa

At least according to the World Bank Group:

Sub-Saharan Africa has been the region with the highest number of reforms each year since 2012. This year, Doing Business captured a record 107 reforms across 40 economies in Sub-Saharan Africa, and the region’s private sector is feeling the impact of these improvements. The aver- age time and cost to register a business, for example, has declined from 59 days and 192% of income per capita in 2006 to 23 days and 40% of income per capita today. Furthermore, the average paid-in minimum capital has fallen from 212% of income per capita to 11% of income per capita in the same period.

See the 2019 Doing Business Report here.

Here are some questions from last year on the integrity of the Doing Business Index.

The U.S. tops list of FDI projects in Africa

This is from EY’s 2018 Africa Attractiveness report:

Screen Shot 2018-10-30 at 5.27.43 PMMature market investors continue building on their deep-seated ties to Africa. In 2017, the US remained the largest investor in the continent, with a noticeable 43% growth in FDI projects. Western Europe, another well-established investor, also built on its already strong investments into Africa, up by 17%. However, emerging-market investments fell, with both intra-regional and Asia-Pacific investment declining by 12% and 13%, respectively. This is, in part, attributable to slower emerging markets growth and weak commodity prices.

It is odd that this report does not give the dollar values of FDI projects. But it has a summary of the distribution of projects and the number of jobs created. This is an important indicator because it reveals projects’ real impact on the real economy — as opposed to projects designed to create enclave economies. Notice that China is far and away the leader on this metric — with Chinese projects resulting in nearly three times as many jobs as American projects (FDI from Italy appears to be particularly good at producing actual jobs).

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Here’s another interesting observation on the sectoral focus on FDI projects from the report:

Over the past decade, we have discussed a shift from extractive to “consumer-facing” sectors, thanks to Africa’s growing consumer market. Mining and metals, along with coal, oil and gas, previously the major beneficiaries of FDI flows, have slowed, while consumer products and retail (CPR), financial services, and technology, media and telecommunications (TMT) have risen.

In 2017, FDI shifted somewhat, with consumer-facing sector investments slowing, in line with challenging operating conditions. The focus changed instead to manufacturing, infrastructure and power generation.

And finally, here are of “FDI-to-jobs” conversation rates. On this measure South Africa and Kenya stand out for their apparent inefficiency in converting FDI projects into jobs.

Screen Shot 2018-10-30 at 5.54.29 PM.pngMore on this here.

 

 

GRAÇA MACHEL’S LETTER TO WINNIE MADIKIZELA-MANDELA

This is from Eye Witness News:

As I struggle to accept your transition, I take solace in the fact that you have risen to become one of the brightest stars in the sky where you will remain ever present and radiantly shining. You will continue to serve as a guide to your loving family, your grateful nation, our beloved Africa, and indeed, the world.

winnieThe extraordinary life you led is an example of resilient fortitude and inextinguishable passion that is a source of inspiration to us all of how to courageously confront challenges with unwavering strength and determination.

Thank you for your brilliant wisdom, your fierce defiance and your stylish beauty.

Fortunately, stars shine brightest during the darkest of hours. I know you will continue to illuminate our sky, even through the storms and clouds. Your legacy will be an uplifting beacon from which we can continue to draw guidance and strength during difficult times.

You loved our people unconditionally and sacrificed so much for our freedom. It is my prayer that as befitting tributes are paid to you both at home and abroad, all of us will internalise the values you helped to mould and birth into existence.

As a nation, I hope we will stand tall and proud, and as uncompromising as you were in the defence and protection of our rights. As one of our brightest stars, continue to be the lioness that protects your children and your grandchildren. Warm their hearts so that while your transition may shake them, it does not break their spirit.

Your legacy is everlasting. Take a well-deserved rest in peace, my BIG sister.

Love and Respect Always,

Your little sister, Graça.

May your spirit live on in all of us, Winnie Mandela. A great human being. A precious gift to humanity. You belong in the pantheon of the greatest sons and daughters of the Continent who ever lived.

On Zuma’s Exit in South Africa

Sisonke Msimang has a nice take over at FP:

Zuma was elected president of the ANC in December 2007 in a bitter and bruising battle against Mbeki, the man who had sacked him just a few years earlier. The following year, the ANC recalled Mbeki, triggering his resignation as president of the country.

Zuma bested his opponent in 2007 by gathering a coalition of the wounded. At the time, there were various factions within the ANC that felt aggrieved by Mbeki’s leadership style and by his economic conservatism. Many on the left within the party believed that in their haste to appease the markets and encourage international investment, the ANC’s leaders had conceded too much terrain to big business in the years following apartheid.

Zuma was known as an affable but flawed man. Union leaders and young radicals opposed to Mbeki — men such as Julius Malema, who was then the head of the ANC’s Youth League, and Zwelinzima Vavi, who headed the Congress of South African Trade Unions at the time — saw the man they were installing as malleable. They hoped Zuma would promote pro-labor and pro-poor policies, so they struck a Faustian bargain. Despite his obvious personal shortcomings, and the significant political liabilities he carried, they agreed to put him in power if he allowed them to run economic policy.

Being an economic conservative, albeit without Mbeki’s professorial demeanor, I am curious to see how President Cyril Ramaphosa will navigate popular demands for a renegotiation of the post-apartheid settlement which he helped midwife. Also, as corruption in South Africa did not begin with Zuma (or the end of apartheid), it will likely not end with his departure. Perhaps the biggest challenge ahead for the ANC will be to temper expectations. If Ramaphosa is seen to be too close to South Africa’s economic elite, it might elicit a populist backlash with dire economic and social consequences for South Africans. 

Here’s is Zuma’s resignation letter.

Cape Town’s Water is Running Out

This is from NASA:

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And this is from the New York Times:

The Western Cape Province, where Cape Town is, has been in severe drought for three years. The water shortage has been amplified by the population boom here; more than a million new residents have arrived in the city in the past 15 years. The city’s desperate attempts to build desalination plants and install new groundwater pumps may help, but these solutions seem to be the equivalent of building an extra lane on an already jammed highway. The underlying causes of the shortage are likely to continue to stress the system. Other cities in drought-prone regions should pay close attention.

…. There are many people who still aren’t doing enough to curb usage, but in a city of high inequality and concentrated wealth and privilege, there’s a leveling that’s happening. Behaviors have changed quickly and on a broad scale. The city has published maps that indicate which households are above or below the recommended water consumption level. It’s now commonplace to see an unflushed toilet in a fancy restaurant, per guidelines that advise, “When it’s yellow, let it mellow.” I find this motivating; it’s evidence of a collective consciousness and effort.

Apparently, authorities knew of the impending crisis but did little to avert it — at least according to the Cape Times back in 1990.

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On North Korea’s Lucrative Relationship With African States

A number of African countries have close ties to North Korea. And it is for the very same reasons that these states have (or had) ties with Cuba, China, and USSR/Russia:

Namibian officials describe a different North Korea — a longtime ally, a partner in development and an affordable contractor. Since the 1960s, when North Korea began providing support for African nations during their independence struggles with European colonial powers, the regime has fostered political ties on the continent that have turned into commercial relationships.

Recall that it is China that was willing to come to the aid of landlocked Zambia after apartheid South Africa and apartheid-lite Southern Rhodesia threatened the country’s trade links on account of its support for nationalists from both countries. The USSR and Cuba were also vital allies of African nationalist liberation movements at a time when the West was mired in doublespeak over decolonization and racial equality on the Continent. Cuba, in particular, committed blood and treasure in the liberation of Angola and Southwest Africa (Namibia).

Nelson Mandela vowed never to forget friends that aided the ANC against apartheid:

All to say that China, Russia, Cuba, and North Korea are not merely using African states. It has always been a game played on the basis of mutual interests, with the distribution of benefits dictated by the prevailing balance of bargaining power.

On the Haitian Revolution

This is from Michel-Rolph Trouillot’s Silencing the Past: Power and Production of History:

The Haitian revolution therefore entered history with the peculiar characteristic of being unthinkable even as it happened. Official debates and publications of the times, including the long list of pamphlets on Saint-Domingue published in France from 1790 to 1804, reveal the incapacity of most contemporaries to understand the ongoing revolution on its own terms. They could read the news only with their ready-made categories, and these categories were incompatible with the idea of a slave revolution [p. 73]

The discursive context within which news from San-Domingue was discussed as it happened has important consequences for the historiography of Saint-Domingue/Haiti. If some events cannot be accepted even as they occur, how can they be assessed later? In other words, can historical narratives convey plots that are unthinkable in the world within which these narratives take place? How does one write a history of the impossible?

As the power of Louverture grew, every other party struggled to convince itself and its counterparts that the achievements of black leadership would ultimately benefit someone else. The new black elite had to be, willingly or not, the pawn of a “major” international power. Or else, the colony would fall apart and a legitimate international state would pick up the pieces. Theories assuming chaos under black leadership continued even after Louverture and his closest lieutenants fully secured the military, political, and civil apparatus of the colony….. [p. 94]

I read Silencing the Past right after reading C. L. R. James’ The Black Jacobins, and strongly recommend reading both together.

As I read both books I couldn’t help but wonder why my high school history had nothing on the Haitian revolution (which proves Trouillot’s point). It seems like the Haitian revolution, even if in sanitized form, would have been a good fit with the sanitized versions of the Mau Mau insurgency and the Algerian and Malaya wars that I was exposed to as a teenager.

More broadly, it seems like the teaching of decolonization in Kenya could benefit from more Haiti and Fanon, side by side with Mandela, Gandhi, and MLK. It is not a stretch to imagine that the threat of violence made the successes of the Mandelas of history more likely. To talk about the ANC without mentioning Umhonto we Sizwe is to stick one’s head in the sand.

Answers to Some of Team Trump’s Questions on Foreign Aid to Africa

A piece in the New York Times highlights some of the Africa-related queries posed by Team Trump to the State Department. Sub-Saharan Africa’s 48 countries get $8b in U.S. aid each year. The average country receives far less than critical U.S. allies like Afghanistan ($5.5 billion), Israel ($3.1 billion), Iraq ($1.8 billion) and Egypt ($1.4 billion).

Here are some answers to Team Trump’s questions.

With so much corruption in Africa, how much of our funding is stolen? Why should we spend these funds on Africa when we are suffering here in the U.S.?

 First of all, corruption is not the biggest impediment to success in the aid business. Often, it is poor planning and execution. And most of the time this tends to be the fault of the donors themselves. Research shows that aid works best when complemented with strong local capacities. This requires knowing what those capacities are, or investing in their long term development.

I would suggest that the administration worries more about planning and execution. How can you make your aid agencies better at identifying and executing on projects? How can you help African countries improve their absorption capacity of aid dollars without too much distortion of their local political economies? How can you move away from projects predicated on good will, and into ones that are anchored on self-interest and value creation?

Africans want jobs. Not handouts. And the 0.2% of the U.S. budget that goes to this region each year can be a powerful tool for shifting incentives in the right direction as a far as job creation is concerned. Want to export more GM cars or carrier air conditioning units to Lagos? Then help create the demand by creating jobs in Lagos.

The new administration should also end the double talk of financing corruption and condemning it at the same time.

screen-shot-2017-01-14-at-2-17-58-pmTake the example of security assistance. If you want to reduce corruption in military procurement, I would suggest that you channel all assistance through the normal appropriation processes in African legislatures. More people will know how much money is going where, thereby increasing the likelihood of greater accountability. The same applies for budget support. Strengthen existing constitutional appropriation processes so that bigger constituencies get to own the aid dollars.

Leaders do terrible things all the time for political reasons, and not because of an inherent failure in moral judgment. Learn to respect and trust your African counterparts. Know their interests. Don’t think and act like it is 1601.

We’ve been fighting al-Shabaab for a decade, why haven’t we won?

Well, for a number of reasons. Kenya, Ethiopia, the U.S., and the other TTCs are working at cross-purposes. The first best option would be to strengthen Mogadishu as the center of a strong unitary state. But no one wants that. Not the Somalian elites running the state-lets that make up the federal state. Not Kenya — whose goal seems to be no more than creating a buffer stable region in Jubaland. Not Ethiopia — whose elites are more concerned about Pan-Somalia irredentism and their own domestic politics. And certainly not the TTCs — who are largely in it for the money and other favors from Washington and Brussels. The second best option would probably be to localize the Al-Shabaab problem and then strengthen the Somali state-lets so that they can be able to fight the group. However, by globalizing the “war on terror” the U.S. has largely foreclosed this option. Also, Mogadishu would not want to cede too much military power to the states.

All to say that the U.S. cannot win the fight against al-Shabaab, certainly not by raining fire from the air.

Somalians, with some help from their neighbors, are the best-placed entity to win the war. But for this to happen, all actors involved — and especially Ethiopia and Kenya — must have an honest discussion about both short-term and long-term objectives of their involvement, and the real end game.

Most of AGOA imports are petroleum products, with the benefits going to national oil companies, why do we support that massive benefit to corrupt regimes?

Again, you should not approach this problem from the perspective of a saintly anti-corruption crusader. Moralizing from the high mountains is boring, and does not solve anything. I thought the Trump Team would be into dealing with the world as it is. Appeal to the specific interests involved. Think creatively.

It turns out that public finance management is a lot harder than most people think. Don’t expect people to be honest and patriotic. Help design PFM systems that are robust to the worst of thieves.

Here, too, I would suggest a move towards mainstreaming resource sector transactions into the normal appropriation processes. For instance, the administration can introduce greater transparency in the oil business, and create stronger links between oversight authorities in the host countries and the American firms involved. This will not end corruption, but it will serve to disperse power within the oil producing countries. And that would be a good thing.

Also, a quick reminder that AGOA involves more than just oil. Africa’s tiny textiles sector benefits too. Doing more to develop this sector would create tens of thousands of jobs, thereby reducing aid dependence.

We’ve been hunting Kony for years, is it worth the effort?

Nope.

The LRA has never attacked U.S. interests, why do we care? Is it worth the huge cash outlays? I hear that even the Ugandans are looking to stop searching for him, since they no longer view him as a threat, so why do we?

I have no idea.

May be this has been used as a way of maintaining ties with the Ugandan military in exchange for continued cooperation in central Africa and in Somalia? May be it is a secret training mission for the U.S. military in central Africa?

I honestly have no idea.

Is PEPFAR worth the massive investment when there are so many security concerns in Africa? Is PEPFAR becoming a massive, international entitlement program?

PEPFAR has saved millions of lives. And I would argue that it is probably America’s most important investment in soft power across Africa.

I would suggest a few modifications, though. The new administration should think creatively about how to use PEPFAR dollars to strengthen African public health *systems* in a manner that will allow them to provide effective care beyond HIV/AIDS. Malaria and GI diseases kill way more people. These need attention, too.

How do we prevent the next Ebola outbreak from hitting the U.S.?

By strengthening public health systems in countries that are likely to experience Ebola outbreaks.

State of Capture: Corruption in Jacob Zuma’s South Africa

This is from Quartz Africa: 

The 355-page report detailing corruption in South Africa’s ruling party offers one rare uplifting moment. In the report, deputy finance minister Mcebisi Jonas reveals more details of how he turned down an offer by the powerful Gupta family of 600 million rand (about $44 million) to be the country’s finance minister.

Jonas, in an interview with Thuli Mandonsela, the country’s former anti-corruption chief who spearheaded the report released today, said he had agreed to meet with president Jacob Zuma’s son Duduzane Zuma on Oct. 23 last year, a few months before then finance minister Nhlanhla Nene was dismissed, kicking off a hailstorm of corruption allegations against the president.

Jonas met the younger Zuma at the Hyatt Regency hotel in the Johannesburg suburb of Rosebank where Zuma asked if they could move to a more private location for discussions “with a third party.”

Jonas was then taken to the Gupta compound in the suburb of Saxonwold where they were joined by Ajay Gupta, the eldest of the Gupta brothers, who briskly informed the deputy minister that “they had been gathering intelligence on him and those close to him.” Gupta informed Jonas that they were going to make him minister of finance, to which Jonas said that only the president could make that decision.

You can download the full State of Capture report here (pdf).

For more on the history of corruption in South Africa see here.

Variagated Africa: Trends in Economic Performance in Two Charts

This is from the IMF’s Monique Newiak:

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In summary:

Non-commodity exporters, around half of the countries in the region, continue to perform well with growth levels at 4 percent or more. Those countries benefit from lower oil import prices, improvements in their business environments, and strong infrastructure investment. Countries such as Côte d’Ivoire, Ethiopia, Senegal, and Tanzania are expected to continue to grow at more than 6 percent for the next couple of years.

Most commodity exporters, however, are under severe economic strain. This is particularly the case for oil exporters like Angola, Nigeria, and five of the six countries from the Central African Economic and Monetary Union, whose near-term prospects have worsened significantly in recent months despite the modest uptick in oil prices. In these countries, repercussions from the initial shock are now spreading beyond the oil-related sectors to the entire economy, and the slowdown risks becoming deeply entrenched.

It should be obvious, but it bears repeating that there is quite a bit of variation in economic performance across the 55 states on this vast continent.

My personal Africa growth index consists of Senegal, Cote d’Ivoire, Nigeria, Ghana, Gabon, Cameroon, Ethiopia, Kenya, Zambia, Angola, and South Africa. And despite ongoing turbulence in a number of the key economies in this basket, I am confident that the turbulence will not completely erase the gains of the last two decades.

 

The Place of Race and Racism in International Relations

In case you have not read Susan Pedersen’s review of Robert Vitalis’ White World Order, Black Power Politics: The Birth of American International Relations, you should.

Here is an excerpt:

The Journal of Race Development, established in 1910, was one of a spate of academic journals, associations and institutes founded as American social scientists came to grips with their country’s expanding global and imperial role. The journal’s title, jarring today, reflects perfectly the centrality of the category of ‘race’ to political science at the time. During the ‘Wilsonian moment’ of 1919, the journal was rechristened the Journal of International Relations without much disturbing its contributors or character. A few years after that, it was bought and renamed again by a New York-based association of internationalist businessmen, officials and academics, the Council on Foreign Relations. Yes, that’s right: it becameForeign Affairs, the pre-eminent journal of the foreign policy establishment.

This is just one of the startling and illuminating genealogies Vitalis pieced together during the ten years or more he spent researching this book. White World Order, Black Power Politics does two things. First, it provides a critical history of the institutional development of the field of international relations in the United States, from its founding at the turn of the century through to the Cold War. This history is radically unfamiliar: the ‘origin story’ taught on undergraduate courses, which traces the field’s core concepts (realism, liberal internationalism) back to Thucydides or Machiavelli or Wilson is, Vitalis insists, a post-1945 invention. Instead, at the moment of its American birth, ‘international relations meant race relations.’ Races, not states or nations, were considered humanity’s foundational political units; ‘race war’ – not class conflict or interstate conflict – was the spectre preying on scholars’ minds. The field of international relations was born to avert that disaster.

A blunter way to put this, and Vitalis is blunter, is that international relations was supposed to figure out how to preserve white supremacy in a multiracial and increasingly interdependent world. Segregation and Jim Crow had done the trick at home, where non-white populations were in the minority, but how could white America govern its newly annexed and overwhelmingly non-white territories without losing its republican soul? A few white scholars thought the task impossible. Indeed, one of the most famous – John Burgess, founder of Columbia’s School of Political Science and of the Political Science Quarterly – opposed President McKinley’s imperial adventuring precisely because it threatened the democratic institutions he thought suited to ‘Teutonic’ peoples alone. ‘American Indians, Asiatics and Africans cannot properly form any active, directive part of the political population which shall be able to produce modern political institutions,’ he warned. Unless it wanted to go the way of Rome, America should leave empire alone.

Something to think about for students of development and liberal international institutions, both big and small.

The book is available for purchase here. I can’t wait for my copy to arrive.

How to Eliminate Malaria

Sri Lanka is the latest country to be declared malaria free by the WHO.

How did they do it?

According to the New York Times:

In 2000, outside the rebel-controlled areas in the northeast, malaria cases began dropping as the government, with donor help, deployed a mix of indoor spraying, bed nets, rapid diagnostic kits and medicines that combined artemisinin, an effective treatment, with other drugs.

The government also screened blood samples drawn — for any reason — in public clinics and hospitals for malaria infection, and officials established a nationwide electronic case-reporting system.malariaeradication

In war-torn areas, the disease retreated more slowly, although the Tigers often cooperated with malaria-control teams because their villages and fighters also suffered.

Nonetheless, in a population of 20 million, it took years to get rid of the last few hundred annual cases. Most were soldiers and itinerant laborers, often from India, who worked in remote slash-and-burn farming areas and in logging and gem-mining camps.

Someone tell African policymakers that bed nets and behavior change are not enough.

Every other region of the world appears to be willing and able to combine vector (mosquito) control with other strategies of containing malaria with success (and enthusiastic donor support). But for some reason mosquito control is still lagging in Africa, even in otherwise strong and stable states. In some instances this has been due to environmental concerns while in others it has been due to the misplaced priorities of public health officials, donors, development agencies, and academic researchers.

The result:

About 3.2 billion people – nearly half of the world’s population – are at risk of malaria. In 2015, there were roughly 214 million malaria cases and an estimated 438 000 malaria deaths. Increased prevention and control measures have led to a 60% reduction in malaria mortality rates globally since 2000. Sub-Saharan Africa continues to carry a disproportionately high share of the global malaria burden. In 2015, the region was home to 89% of malaria cases and 91% of malaria deaths. 

214 million malaria cases amount to lots and lots of lost productivity. Also, losing one Miami every year in deaths is simply unacceptable.

More on this here. 

When Markets Discipline Politics

President Jacob Zuma continues to be in conflict with his own Finance Minister, Pravin Gordham, over fiscal policy (and propriety in the management of public finances). The markets trust the latter. The former has more power, including the coercive apparatus of South Africa’s administrative state. Having just presided over a disastrous outing for the ruling ANC in this month’s municipal elections, Zuma needs to create more policy wiggle room for his floundering administration. And Gordham’s commitment to fiscal discipline stands in the way. So far the markets’ reaction to Zuma’s machinations at the Finance Ministry have managed to discipline intra-ANC elite politics. But as Zuma gets closer to retirement (or being forced out) it is unclear how much he is willing to continue humoring the markets…

The revelation on Tuesday that Gordham may be forced out via (likely dubious) charges of improper conduct while he served as head of the South African Revenue Service sent the rand tumbling, again.

This is the third time the police unit, known as the Hawks, have questioned Gordhan. Earlier this year, just days before he was set to deliver a crucial budget speech, the Hawks demanded Gordhan answer written questions. Then in May, rumors of Gordhan’s imminent arrest sent the currency tumbling, just as ratings agencies were assessing South Africa. Gordhan was not arrested then, and went on lead South Africa’s recent economic recovery, assuring international investors of the country’s stability.

Screen Shot 2016-08-24 at 11.13.59 AMAnalysts believe Gordhan is the target of president Jacob Zuma and his political allies. The two are reported to be at loggerheads over the management of South Africa’s state-owned enterprises, especially the national carrier South African Airways. Gordhan’s office has delayed bailing out the embattled carrier until a new board is appointed (effectively removing those close to Zuma, according to reports). Gordhan’s office has also curbed spending on plans to build a new nuclear power plant.

Earlier this week, a cabinet briefing announced that Zuma himself would now directly oversee state-owned companies. Analysts say the move allows Zuma to maintain political power and protect his interests after historic losses in this month’s local government elections. Zuma’s office has denied that there is a rift between the president and the finance minister. According to reports, Gordhan is determined to resist pressure to resign

For more on this visit Quartz Africa: