BMI View: Sovereign risk will remain elevated in Sub-Saharan Africa (SSA) in the coming years, amplified by continued fallout from the commodity bust and elevated political risk.
While we anticipate a modest rebound in commodity prices in the coming quarters, the slow pace of improvements suggests this will offer only limited relief to fiscal and trade dynamics, unlikely to be sufficient to allow the countries to begin to substantially rebuild their macroeconomic buffers. Moreover, the impact of structurally lower commodity prices compared to the 'boom' years will only be exacerbated as many of the region's major policymakers remain hesitant to enact much-needed reforms, while rising security risks in East and West Africa weigh on investor sentiment. We identify three key themes driving sovereign risk across the SSA region
Poor fiscal management will keep borrowing requirement high
SSA faces structurally high fiscal deficits in the years ahead, with the average regional shortfall narrowing only modestly in 2016 from a 2015 peak of 6.1% of GDP. The commodity bust is the most obvious catalyst, and will continue to temper revenue growth in the years ahead. However, much of the region also suffers from structural weaknesses on the expenditure side, including sizeable public sector wage burdens and a tendency toward surging pre-election spending.
Debt levels are still relatively low for much of the region, and in the near term, with the
UK's Brexit vote prompting more accommodative monetary policy in the developed world, this will temper some of the risks involved in financing these large deficits. That said, with borrowing requirements poised to remain high, when borrowing costs do rise this will make financing the deficit a more significant challenge, especially as many countries' domestic markets are still relatively shallow.
Moreover, while the majority of African economies are not facing the risk of a major credit event in the near term, there are some countries that we do see as significantly more vulnerable. Angola, outlined below as one of the countries showing signs of reluctance to reform, is one of these. The external debt to GDP ratio is relatively low, but an examination of public external debt servicing costs as a proportion of export revenues and fiscal revenues suggests the country has significantly impaired levels of liquidity compared to much of the region. Meanwhile, the coming-to-light of USD1.4bn of previously undisclosed debt in
Mozambique has shot the country's overall debt burden up to nearly 80% of GDP, exposing significant structural weaknesses in the country's external financing and fiscal positions, and acting as a persistent long-term headwind to macroeconomic stability. Indeed, while we believe that the government will successfully meet its eurobond payments, or else be able to restructure, there are still some medium-to-longer term risks. Slower-than expected-growth, a further sell-off of the Mozambican metical (with 85% of total debt denominated in US dollars) or a greater-than-expected delay in a return of foreign aid (a chunk of which was cut off in the wake of the discovery of the debt) could see the country facing a disorderly default.
Policy choices matter; Ghana over Nigeria and Angola
In an environment of increasing external headwinds, policymakers' willingness to enact reforms to bolster the investment environment and temper fiscal deficits will have a significant impact on sovereign credentials. One of the significant policy choices facing many SSA countries that puts this starkly into relief is whether to seek IMF assistance – enacting the macroeconomic reforms necessary to do so – or pursue bilateral loans, often with China.
Ghana falls into the first category, after entering into an Extended Credit Facility programme with the IMF in April 2015. We cannot completely rule out that the November elections will lead to a ramp-up in spending, but note that efforts by the National Democratic Congress to portray itself as the party of economic prudence will likely preclude significant fiscal profligacy and underpins our view for a steadily narrowing budget deficit in the years ahead.
In contrast, in April, Nigeria sought a USD6.0bn loan from China, which we see as a way to avoid going to the IMF for assistance. While we have since seen the country taking steps toward a more investor-friendly policy position, most notably with the removal of capital controls and the free-float of the naira (both in June 2016), investors are only likely to slowly return, and we now believe that the prolonged delays in enacting policy will see real GDP growth contract in 2016. Similarly Angola announced that it would end talks with the IMF over opening a lending facility in July. With the price of Brent crude still subdued, this leaves questions over how the country will finance its twin current account and fiscal deficits, and suggests increased borrowing from Beijing.
In both cases, we see the embrace of Chinese assistance as a decision by these governments to 'kick the can down the road'. While Chinese aid comes with fewer strings attached regarding reforms, it may mean the countries have to pay higher interest rates. Moreover, the failure to enact investor-friendly reforms and tighten fiscal policy will act as a long-term headwind to macroeconomic growth and stability.
While South Africa avoided a downgrade to a sub-investment grade credit rating by
Fitch and S&Pin June, this is still a significant risk for SSA's second largest economy. In the February budget proposal, Finance Minister Pravin Gordhan introduced a number of measures which, while unlikely to go all the way toward resolving the fiscal challenges facing the country, will begin to close the gap. Meanwhile, the finance minister has also reported that the government is 'close' to announcing growth-supportive labour market reforms. If carried to fruition, these measures would go a significant way toward reassuring investors. However, efforts to temper the size of the deficit will be undermined to a certain degree by high inflation – ramping up inflation-linked expenditures such as social grants and services and adding to demands for higher public wages. Moreover, whether the finance minister will receive support from the ruling African National Congress (ANC) sufficient to maintain fiscal consolidation efforts remains a continued question. Notably, with the ANC poised to perform poorly in the August local elections, this is likely to undermine already weak cohesion in the party, leading to a period of sclerotic policy making and likely stymieing promised reforms.
This is a question that should seriously exercise the mind of every Botswana citizen and every science researcher, every health worker and every political leader political.
The Covid-19 currently defines our lives and poses a direct threat to every aspect and every part of national safety, security and general well-being. This disease has become a normative part of human life throughout the world.
The first part of the struggle against the murderous depredation of this disease was to protect personal life through restrictive health injunctions and protocols; the worst possibly being human isolation and masks that hid our sorrows and lamentations through thin veils. We suffered that humiliation with grace and I believe as a nation we did a great job.
Now the vaccines are here, ushering us into the second phase of this war against the plague; and we are asking ourselves, is this science-driven fight against Covid-19 spell the end of pandemic anxiety? Is the health nightmare coming to an end? What happy lives lie ahead? Is this the time for celebration or caution? As the Non State Actors, we have being struggling with these questions for months.
We have published our thoughts and feelings, and our research reviews and thorough reading of both the local and international impacts of this rampaging viral invasion in local newspapers and social media platforms.
More significantly, we have successfully organised workshops about the impact of the pandemic on society and the economy and the last workshop invited a panel of health experts, professionals, and public administers to advance this social dialogue as part of our commitment to the tripartite engagement we enjoy working with Government of Botswana, Civil Society and Development partners. These workshops are virtual and open to all Batswana, foreign diplomatic missions based in Gaborone, UN agencies located in Gaborone and international academic researchers and professional health experts and specialists.
The mark of Covid-19 on our nation is a painful one, a tragedy shared by the entire human race, but still a contextually painful experience. Our response is fraught with grave difficulties; limited resources, limited time, and the urgency to not only save lives but also avert economic ruin and a bleak future for all who survive. Several vaccines are already in the market.
Parts of the world are already doing the best they can to trunk the pestilential march of this disease by rolling out mass-vaccinations campaigns that promise to evict this health menace and nightmare from their public lives. Botswana, like much of Africa, is still up in the disreputable, and, unenviable, preventative social melee of masked interactions, metered distances, contactless commerce.
We remain very much at the mercy of a marauding virus that daily runs amuck with earth shattering implications for the economy and human lives. And the battle against both infections and transmissions is proving to be difficult, in terms of finance, institutional capacities and resource mobilization. How are we prepared as government, and as citizens, to embrace the impending mass-vaccinations? What are the chances of us succeeding at this last-ditch effort to defeat the virus? What are the most pressing obstacles?
Does the work of vaccines spell an end to the pandemic anxieties?
Our panellists addressed the current state of mass-vaccination preparedness at the Botswana national level. What resources are available? What are the financial, institutional and administrative operational challenges (costs and supply chains, delivery, distribution, administering the vaccine on time, surveillance and security of vaccines?) What is being done to overcome them, or what can be done to overcome them? What do public assessments of preparedness tell us at the local community levels? How strong is the political will and direction? How long can we expect the whole exercise to last? At what point should we start seeing tangible results of the mass-vaccination campaign?
They also addressed the challenges of the anticipated emerging Vaccinated Society. How to fight the myths of vaccines and the superstitions about histories of human immunizations? What exactly is being done to grow robust local confidence in the science of vaccinations and the vaccines themselves? More significantly, how to square these campaigns vis-vis personal rights, moral/religious obligations?
What messages are being sent out in these regards and how are Batswana responding? What about issues of justice and equality? Will we get the necessary vaccines to everyone who wants them? What is being done to ensure no deserving person is left behind?
They also addressed issues of health data. To accomplish this mass-vaccination campaign and do everything right we need accurate and complete data. Poor data already makes it very hard to just cope with the disease. What is being done to improve data for the mass-vaccination campaign? How is this data being collected, aggregated and prepared for real life situation/applications throughout Botswana in the coming campaign?
We know in America, for example, general reporting and treatment of health data at the beginning of vaccinations was so poor, so chaotic and so scattered mainstream newspapers like The Atlantic, Washington Post and the New York Times had to step in, working very closely with civil society organizations, to rescue the situation. What data-related issues are still problematic in Botswana?
To be specific, what kind of Covid-19 data is being taken now to ready the whole country for an effective and efficient mass-vaccination program?
Batswana must be made aware that the end part of vaccination will just mark the beginning of a long journey to health recovery and national redemption; that in many ways Covid-19 vaccination is just another step toward the many efforts in abeyance to fight this health pandemic, the road ahead is still long and painful.
For this purpose, and to highlight the significance of this observation we tasked our panellists with the arduous imperative of analysing the impact of mass-vaccination on society and the economy alongside the pressing issues of post-Covid-19 national health surveillance and rehabilitation programs.
Research suggests the aftermath of Covid-19 vaccination is going to be just as difficult and uncertain world as the present reality in many ways, and that caution should prevail over celebration, at least for a long time. The disease itself is projected to linger around for some time after all these mass-vaccination campaigns unless an effort is made to vaccinate everyone to the last reported case, every nation succeeds beyond herd immunity, and cure is found for Covid-19 disease. Many people are going to continue in need of medications, psychological and psychiatric services and therapy.
Is Botswana ready for this long holdout? If not, what path should we take going into the future? The Second concern is , are we going to have a single, trusted national agency charged with the mandate to set standards for our national health data system, now that we know how real bad pandemics can be, and the value of data in quickly responding to them and mitigating impact? Finally, what is being done to curate a short history of this pandemic? A national museum of health and medicine or a Public Health Institute in Botswana is overdue.
If we are to create strong sets of data policies and data quality standards for fighting future health pandemics it is critical that they find ideological and moral foundations in the artistic imagery and photography of the present human experience…context is essential to fighting such diseases, and to be prepared we must learn from every tragic health incident.
Our panellists answered most of these questions with distinguished intellectual clarity. We wish Batswana to join us in our second Mass-vaccination workshop.
Today is International Women’s Day – it’s a moment to think about how much better our news diet could be if inequities were eliminated. In 1995, when the curtains fell in one of the largest meetings that have ever brought women together to discuss women in development, it was noted that women and media remain key to development.
Twenty-six years later, the relevant “Article J” of the Beijing Platform for Action, remains unfulfilled. Its two strategic objectives with regard to Women and Media have not been met. They are Increase the participation and access of women to expression and decision-making in and through the media and new technologies of communication
Promote a balanced and non-stereotyped portrayal of women in the media.
Today, as we mark International Women’s Day, it’s an indictment on both media owners and civil society that women remain on the periphery of news-making. They cannot claim equal space in either the structures of newsrooms or in the content produced, be that as sources of news or as the subjects of reports. Indeed, the latest figures from WAN-IFRA’s Women in News Programme show just one in five voices in news belong to women*, be they as sources, as the author or as the main character of the news report.
Some progress was evident several years back, with stand-out women being named as chief executive officers, editors in chief, managing editors and executive editors. But these gains appear short lived in most media organisations. Excitement has turned to frustration as one-step forward has been replaced with three steps backwards. In Africa, the problem is acute. The decision-making tables of media organisations remain deprived of women and where there are women, they are surrounded by men.
Few women have followed in the footsteps of Esther Kamweru, the first woman managing editor in Kenya, and indeed sub-Saharan Africa. Today’s standout women editors include Pamela Makotsi-Sittoni (Nation Media Group, Kenya), Barbara Kaija (New Vision, Uganda), Mary Mbewe (Daily Nation, Zambia), Margaret Vuchiri (The Monitor, Uganda), Joyce Shebe (Clouds, Tanzania), Tryphinah Dongwana (Weekend Post, Botswana), Joyce Mhaville (Independent Television -ITV, Tanzania) and Tuma Abdallah (Standard Newspapers,Tanzania). But they remain an exception.
The lack of balance between women and men at the table of decision making has a rollback effect on the content that is produced. A table dominated by men typically makes decisions that benefit men.
So today, International Women’s Day is a grim reminder that things are not rosy in the news business. Achieving gender balance in news and in the structure of media organisations remains a challenge. Unmet, it sees more than half of the population in our countries suffer the consequences of bias, discrimination and sexism.
The business of ignoring the other half of the population can no longer be treated as normal. It’s time that media leaders grasp the challenge, not only because it is the right thing to do, but because it also makes a whole lot of business sense: start covering women, give them space and a voice in news-making and propel them to all levels of decision making within your organisation.
We can no longer afford to imagine that it’s only men who make and sell the news and bring in the shillings to fund the media business. Women too are worthy newsmakers. In all of our societies, there are women holding decision making positions and who are now experts in once male-only domains such as engineers, doctors, scientists and researchers.
They can be deliberately picked out to share their perspectives and expertise and bring balance to the profile of experts quoted on our news pages. Media is the prism through which society sees itself and women are an untapped audience. So, as we celebrate International Women’s Day, let us embrace diversity, which yields better news content and business products, and in so doing eliminate sexism. We know that actions and attitudes that discriminate against people based on their gender is bad for business.
As media, the challenge is ours. We need to consciously embrace and reach the commitments made 26 years ago when the Beijing Platform for Action was signed globally. As the news consuming public, you have a role to play too. Hold your news organization to account and make sure they deliver balanced news that reflects the voices of all of society.
Jane Godia is a gender development and media expert who serves as the Africa Director of Women in News programme. WOMEN IN NEWS is WAN-IFRA’s ground-breaking programme to increase women’s leadership and voices in the news. It does so by equipping women journalists and editors with the skills, strategies, and support networks to take on greater leadership positions within their media. www.womeninnews.org
The eve of International Women’s Day presents an opportunity for us to think about gender equality and the long and often frustrating march toward societies that are truly equal.
As media, we are uniquely placed to drive forward this reflection and discussion. But while focusing on the challenges of gender in society, we owe it to our staff and the communities we serve to also take a hard look at the obstacles within our own organisations.
I’m talking specifically about the scourge of sexual harassment. It’s likely to have happened in your newsroom. It has likely happened to a member of your team. It happens to all genders but is disproportionately directed at women. It happens in every industry, regardless of country, culture or context. This is because sexual harassment is driven by power, not sex. Wherever you have imbalances in power, you have individuals who are at risk of sexual harassment, and those who abuse this power.
I’ve been sexually harassed. The many journalists and editors, friends and family members who I have spoken to over the years on this subject have also been harassed. Yet it is still hard for leaders to recognize that this could be happening within their newsrooms and boardrooms. Why does it continue to be such a taboo?
Counting the cost of sexual harassment
Sexual harassment is, simply put, bad for business. It can harm your corporate reputation. It is a drain on the productivity of staff and managers. Maintaining and building trust in your brand is an absolute imperative for media organisations globally. If and when a case gets out of control or is badly handled – this can directly impact your bottom line.
It is for this reason that WAN-IFRA Women in News has put eliminating sexual harassment as a top priority in our work around gender equality in the media sector. This might seem at odds with the current climate where social interactions are fewer and remote work scenarios are in place in many newsrooms and businesses. But one only needs to tune into the news to know that the abuse of power, manifested as verbal, physical or online harassment, is alive and well.
Preliminary results from an ongoing Women in News research study into the issue of sexual harassment polling hundreds of journalists in Sub-Saharan Africa and Southeast Asia indicate that more than 1 in 3 women media professionals have been physically harassed, and just under 50% have been verbally harassed. Just over 15% of men in African newsrooms reported being physically harassed, and slightly less than 1 in 4 reports being verbally harassed. The numbers for male media professionals in Southeast Asia are slightly higher than a quarter on both forms of harassment.
The first step in confronting sexual harassment is to talk about it. We need to strip away the stigma and discomfort around having open conversations about what sexual harassment is and isn’t. Media managers, it is entirely in your power to create dynamics in your own teams that are free from sexual harassment.
Publishers and CEOs, you set the organisational culture in your media company.
By being vocal in recognising that it happens everywhere, and communicating to your employees that you will not tolerate sexual harassment of any kind, you send a powerful message to your teams, and publicly. With these actions, you will help us overcome the legacy of silence around this topic, and in doing so take an important first step to create media environments that truly embrace equality.
Melanie Walker is Executive Director of Media Development of the World Association of News Publishers (WAN-IFRA). She is a creator of Women in News, WAN-IFRA’s ground-breaking programme to increase women’s leadership and voices in the news. It does so by equipping women journalists and editors with the skills, strategies, and support networks to take on greater leadership positions within their media. www.womeninnews.org