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By Ken Stibler, Noah Berman and Nojan Rostami. Executive editor: Dan Keeler

Africa

Rwanda’s Paul Kagame reelected in a landslide

Rwanda’s President Paul Kagame won 99% of the vote in elections held this week, securing another term in the post he has occupied for the past quarter-century, Reuters reports. 

Kagame’s victory, which was marked by alleged electoral irregularities and a largely disqualified opposition, secures him another mandate to lead a country whose economy the World Bank projects will grow by an average of more than 7% for each of the next three years.

The US State Department credits Kagame’s government with creating business-friendly policies that spur economic development, despite the president’s iron grip on power. But the economy remains dependent on international aid, and many challenges to investment in the country persist, including a complex tax process, a dearth of quality raw materials, and high transport costs.

Nigeria announces new economic reforms

Nigerian President Bola Tinubu proposed two new measures this week aimed at bolstering the country’s flagging economy.

On Wednesday, Tinubu asked lawmakers to approve $4 billion in additional government spending, Bloomberg reports. He also suggested a one-time windfall tax on foreign exchange gains made by the country’s banks last year, after Tinubu depreciated the naira. The tax is intended to finance infrastructure spending.

On Thursday, Tinubu approved a new minimum wage of $44 a month, more than double the rate set in 2019.

Analysts say the moves are aimed at deterring mass demonstrations similar to those in Kenya, according to The Africa Report. Thousands of people have taken to the streets across the East African country to protest President William Ruto’s handling of a cost-of-living crisis. Inflation in Kenya is one-seventh the level in Nigeria.

Asia

Pakistan courts instability with move to ban Khan’s party

Pakistan’s government this week banned former Prime Minister Imran Khan’s Pakistan Tehreek-e-Insaf party, arguing that it had sought to obstruct negotiations with the IMF, just days after the fund agreed to a new loan deal. The move carries high risk: Gallup polls show PTI is extremely popular, and previous efforts to ban the party have resulted in mass protests. 

Last weekend Pakistan came to terms with the multilateral lender on a $7 billion loan arrangement. If the deal is approved by the IMF’s executive board, the fund will disburse the loan in installments over the next three years. 

In exchange, Pakistan agreed to broaden its tax base to include more agricultural products and phase out “special economic zones” that the country created in 2012 to incentivize foreign investment. The loan allows Pakistan to capitalize on a year of macroeconomic stability as it recovers from one of its deepest ever economic crises, IMF mission chief in Pakistan Nathan Porter said in a statement. 

Nepal names new PM after coalition government collapses

Nepal appointed a new prime minister this week, days after a vote of no-confidence ousted the country’s previous leader.

The new prime minister, Unified Marxist-Leninist Communist Party of Nepal’s K.P. Sharma Oli, has led the country thrice before. He succeeds Pushpa Kamal Dahal, whose party was formerly a coalition partner of Oli’s. Dahal’s alliance turned against him last week, leading to the collapse of Nepal’s government.

Oli is expected to be tougher on India than Dahal, the New York Times reports. As prime minister in 2015, Oli railed against an Indian economic blockade and signed a trade and transit treaty with China. India now fears that Oli will resurrect Nepal’s participation in China’s Belt and Road Initiative, Firstpost reports.

Kazakhstan and Uzbekistan look to reduce barriers to trade

Kazakhstan and Uzbekistan announced plans this week to double bilateral trade to more than $10 billion, Eurasianet reports. Trade between the two Central Asian neighbors has dipped this year after reaching $4.5 billion last year.  

The agreement is part of a US-backed arrangement known as B5+1, which aims to increase intraregional trade among the five Central Asian states. The strategy aims to decrease the region’s reliance on Russia and China, by far the largest individual trading partners for each Central Asian country. 

Middle East 

Iranian president-elect sets stage for global role 

In an op-ed, in English, published in the state-owned Tehran Times, Iran’s reformist president-elect Masoud Pezeshkian signaled a willingness to engage with the US and EU and establish an “opportunity-driven policy” of “constructive engagement with the world.” He prioritized an immediate ceasefire and intermediate resolution in Gaza and committed to seeking progress on detente and normalization with Saudi Arabia.

Pezeshkian also tipped his hat to China and Russia, affirming them as key allies, and committed to expanding and enhancing cooperation with them “towards a new global order,” particularly within BRICs, the Shanghai Cooperation Organization, and the Eurasian Economic Union. 

Pezeshkian set out a confident agenda, challenging the US to take the first step toward reconciliation by recognizing that its approach to Iran is “non-constructive.”

Some observers are skeptical Pezeshkian can make good on these commitments, given most of the power in Iran rests in Supreme Leader Ayatollah Ali Khamenei’s hands. However, reports published by Reuters, citing sources familiar with the Ayatollah’s thinking, claim Khamenei personally intervened to approve Pezeshkian’s candidacy and give Iran’s reformists their first seat in power in 20 years.

Saudi Arabia in twin push for green energy and FDI

Saudi Arabian firms this week closed a slew of deals on solar and wind energy projects, mostly with Chinese firms and national champions, Bloomberg reports. Two major Chinese solar manufacturers are to build production plants in the kingdom at a cost of $3 billion, in a deal that satisfies Saudi Arabia’s hunger for energy—and investment into its manufacturing sector—and provides a market for some of China’s domestic oversupply of solar panels, Bloomberg reports.

Another Chinese solar manufacturer, Sungrow, also signed an agreement on a 7.8GWh energy storage facility, which will support Saudi Arabia’s goal of diversifying its domestic energy base away from oil and gas.

Saudi Arabia’s sovereign wealth fund, The Public Investment Fund, is also stepping-in on the green energy push, with Bloomberg reporting this week that the PIF is closing in on a deal with China’s wind energy champion Envision to jointly develop a domestic wind turbine manufacturing plant. And state-owned oil giant Aramco this week agreed to buy a 50% stake in American-owned Blue Hydrogen Industrial Gases Company.

Europe

US and EU turn their backs on Georgia amid democratic backsliding

Georgia’s longstanding partnership with the US and the EU appears to be fraying as the ruling Georgian Dream party adopts increasingly anti-Western rhetoric and authoritarian practices, Radio Free Europe reports. Recent signals from Western partners suggest a growing preference for the party’s ouster in the upcoming October parliamentary elections.

The shift in attitude follows the passing of a controversial law that imposes strict controls on foreign-funded media and NGOs, mirroring similar legislation used by Russia to suppress opposition.

The EU is reducing political contacts and increasing cooperation with civil society, and the EU ambassador to Georgia says the country’s accession process to the bloc has been halted due to the government’s actions. Meanwhile, the Pentagon has postponed joint US-Georgia military drills, further straining relations. These moves have been interpreted by many in Georgia as indirect support for the opposition, although Western officials maintain that the elections should be decided by Georgian voters.

Turkey moves to grow gas exports to the EU

Turkey is positioning itself as a key player in the EU’s quest for alternative natural gas supplies, aiming to capitalize on the bloc’s efforts to reduce dependency on Russian gas, Bloomberg reports. Energy Minister Alparslan Bayraktar has expressed Turkey’s readiness to increase gas exports to the EU, but with a crucial caveat: long-term commitments are necessary to justify the required infrastructure investments.

The minister emphasized the need for expanded interconnection capacity between Turkey and Bulgaria, potentially increasing supply from seven to 10 billion cubic meters per year, in collaboration with Azerbaijan’s Socar.

Turkey faces several challenges to its ambitions, including the EU’s proposed gas swap arrangements, which involve redirecting Azerbaijani gas through Turkey to Europe and replacing it with Russian gas in the Turkish market, that Bayraktar described as “convoluted.” Additionally, existing deals, such as Turkey’s agreement with Bulgaria for LNG re-export, are under scrutiny from EU antitrust watchdogs.

Latin America

Paraguay exports hit new record as economy strengthens

Paraguay’s economy has continued its outperformance in the first half 2024, with exports reaching a five-year high of $8.57 billion. The performance amid a year of otherwise volatile global trade is powered by Asuncion’s diversified export portfolio spanning 136 countries for its soy, wheat, pork and manufacturing.

While Paraguay maintains strong ties to Taiwan, the country is seeing a surge of trade with China. Mercosur partners, particularly Argentina and Brazil, remain crucial export markets, while China stands as the leading import source despite the absence of formal diplomatic relations. However dependence on those three large markets bakes insecurity into the Paraguayan economy as the Argentine economic volatility and a Chinese slowdown threatens the volume and attractiveness of their markets.

New gas find brings hope to Bolivia

Bolivia’s President Luis Arce has announced the much-needed discovery of the country’s first new natural gas reserve since 2005, the AP reports. The “mega field” is estimated to contain 1.7 trillion cubic meters of gas with a potential market value of $6.8 billion.

The discovery offers a glimmer of hope for Bolivia’s struggling economy, which has seen a dramatic decline in gas production and exports in recent years. State-owned energy company YPFB invested $50 million in the exploration project, with production expected to commence in 2026 or 2027.

The discovery comes against a backdrop of significant economic and political challenges. Bolivia has transitioned from being a top-10 natural gas producer to a net importer of hydrocarbons, spending more on diesel imports than it earns from gas exports. The country’s previous economic model, built on gas revenues and generous fuel subsidies, proved unsustainable in the face of falling commodity prices.

What We’re Reading

Ghana ‘will experience a broad-based recovery’ in 2025 (FrontierView)

Côte d’Ivoire becomes first country to administer R21 malaria vaccine (Africanews)

US lends Senegalese hospitality group $81mn (Bloomberg)

Ethiopia signs currency swap with UAE worth up to $817mn (The National)

UN: War has displaced 20% of Sudan’s population (Reuters)

Death toll mounts as protests continue in Kenya (Daily Nation)

Kenyan court suspends police ban on protests (BBC)

Rwandan state-linked firm wins security contract for $20bn TotalEnergies project in Mozambique (FT)

Uganda seeks new IMF loan (Bloomberg)

IMF slashes Botswana’s 2024 growth forecast amid diamond market woes (Reuters)

Laos central bank shake-up reveals forex crisis and China dependence (Nikkei)

Singapore-Laos clean power deal stuck over transmission, sources say (Reuters)

Thailand attempts to strike a balance with BRICS and OECD bids (Nikkei)

Indonesian cyberattack signals growing threat in Southeast Asia (Nikkei)

Dozens dead after Bangladesh deploys troops to counter student protesters (FP)

Bangladesh PM Hasina says she prefers India over China for Teesta $1bn river project (Economic Times)

Kazakhstan to raise uranium mining tax by 50% (The Northern Miner)

Saudi Arabia and Israel top Goldman Sachs list of highest change in sovereign risk outlook (Bloomberg)

Saudi bank liabilities grow as rival UAE running away with race to attract FDI (Bloomberg)

US says ISIS “trying to reconstitute” as attacks increase in Iraq and Syria (ABC)

Oman’s SWF seeks bigger share of global shipping market (Bloomberg)

ISIS claims responsibility for terror attack on Shia mosque in Oman (FT)

Microsoft, Amazon and Google post significant losses in Romania (Romania Insider)

Serbian government restarts Rio Tinto’s contentious lithium mine project (Radio Free Europe)

Bidding for Argentina’s Vaca Muerta Oil Assets ‘Very Competitive’ (Hart Energy)

We are committed to providing FMN readers with a free weekly digest of politically unbiased, succinct and clear news and information from frontier and small emerging markets.

Please consider becoming a paid supporter to help cover some of our costs and support our continued development of sharp markets-focused coverage and new informational products. Paid subscribers will also gain exclusive access to our quarterly EM/FM report that aggregates EM insights from 25 major banks, international institutions and consultancies.