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

Africa

Anti-corruption protests erupt in Uganda

Ugandan authorities have detained dozens of demonstrators who participated in anti-corruption protests this week. Protesters marched toward the country’s parliament on Tuesday, after years of frustration with alleged corruption in Uganda’s government boiled over when law enforcement arrested several members of the country’s opposition party.

Protestors demanded the resignation of the speaker of the Ugandan Parliament, who was named in a recent anti-corruption investigation, and the reduction of lawmaker salaries. Human Rights Watch called the detentions a “blatant violation” of Uganda’s constitution, which protects the rights to peaceful assembly and free speech.

The protests drew inspiration from Kenya, the BBC reports. Thousands of demonstrators marched in Nairobi this earlier month, drawing a police response that turned deadly and leading Kenyan President William Ruto to dismiss his cabinet. Protesters continue to call for Ruto’s resignation.

Landslide kills hundreds in Ethiopia

A landslide in southwestern Ethiopia killed hundreds of people this week after days of heavy rains unleashed a torrent of mud. Authorities are still determining the death toll, but the UN estimates that it could reach 500. 

The landslide highlights the rising threat of climate change to Ethiopia’s economy, which is one of the fastest-growing in Africa. Agriculture is the backbone of the economy, employing almost three-quarters of Ethiopians, according to the World Bank. “These rural livelihood systems—including crop cultivation, pastoralism, and agro-pastoralism—are highly sensitive to climate variability and change,” an April report by ReliefWeb warned.

Lingering tensions in the country’s north also threaten to dent its economic prospects. Ethiopia’s government fought a civil war with ethnic factions there between 2020 and 2022, and while the two sides reached a fragile truce, sporadic fighting continues. 

Private sector pushes for AGOA reauthorization at Washington forum

Executives from some of the largest companies in the US and Africa met with senior American and African officials this week to push for the extension of a trade pact that gives many countries on the continent preferential access to US markets.

The African Growth and Opportunity Act gives 32 countries in Africa duty-free access to the US for almost 2,000 products. At the forum in Washington, DC, US officials voiced their support for extending the program, which will expire next September unless reauthorized. US Secretary of State Antony Blinken said AGOA is “crucial for creating good environments for business.” 

But AGOA reauthorization may depend on who is in the White House. Republican nominee Donald Trump has called for a universal duty on imports. Even if AGOA is renewed, it is unclear how such a levy would apply to countries with which the US shares trade agreements.

Asia 

Bangladesh changes quota system that sparked deadly protests

Courts in Bangladesh rolled back a planned quota system for government jobs that led to the most visible instability the country has experienced in years, DW reports.

Almost two hundred people were killed after throngs of student-led protestors filled the streets of Dhaka and other major cities, AP reports. The demonstrations began after officials laid out a plan to save almost a third of government jobs for descendants of the so-called freedom fighters, who led Bangladesh’s push for independence from Pakistan in 1971.

Critics of the system described it as a handout to supporters of Prime Minister Sheikh Hasina, whose father Sheikh Mujibur Rahman was the country’s first post-independence leader.

The dust has largely settled after the court ruling, although the government can still reserve a significant portion of jobs for specific groups. Meanwhile, the remaining protesters have shifted gears, calling for the resignations of high-level ministers in Hasina’s party, Al Jazeera reports.

Sri Lanka wins back Japanese funding for stalled projects after debt restructuring

Japan will return to funding infrastructure projects in Sri Lanka after the island nation restructured its debt to bilateral creditors earlier this month, AFP reports. It will become the first country to resume working on projects that stalled after Sri Lanka defaulted on its debt in 2022. 

Tokyo will restart work on 11 projects and expects to invest more than $1 billion over the coming five years, Sri Lanka’s finance ministry said. These include the expansion of Sri Lanka’s primary international airport, water sanitation projects and health-care initiatives, Japanese Ambassador to Sri Lanka Mizukoshi Hideaki said.

Japan is Sri Lanka’s second largest creditor after China. 

Philippines reaches tentative sea-sharing deal with China 

China and the Philippines reached a deal last weekend to reduce tensions in the South China Sea, where the two countries have competing claims of sovereignty. But within hours, the deal seemed to be stumbling, CNN reports. 

The deal focused on allowing the Philippines to resupply a ship near the Second Thomas Shoal, a submerged reef about 200 nautical miles from the Philippines and 600 nautical miles from China that both countries claim as their own. Neither side released the details of the arrangement, but the Philippines government said on Friday it had resupplied the vessel.

China’s foreign ministry earlier said the Philippines could conduct these missions only if it first alerted China, CNN reports. The Philippines Department of Foreign Affairs then posted on X that China’s statement was “inaccurate.” 

Middle East

Iran attributes rise in growth to non-oil sectors

Iran’s central bank this week claimed yearly economic growth has reached 4.5% and annual inflation has eased—although it remains above 35%. The CBI data, not yet independently verified, attributes 3.6% of the growth to non-oil sectors, a remarkable claim given that the IMF’s projection for Iran’s total economic growth in 2024 is only 3.3%, inclusive of the oil sector.

Iran has been successfully ramping up oil exports despite ongoing US sanctions, for example by rerouting oil to China via ship-to-ship transfers in Malaysia, which is apparently exporting around 1.5 million barrels per day—far more than its official production capacity. Windfalls from sanctions-busting oil sales have been used to support Iran’s allies, including an alleged $500 million weapons transfer to Armenia, which was denied through official state channels.

Yemeni government and Houthis agree on economic deescalation

The internationally-recognized government of Yemen and Iran-backed Houthi leaders have reportedly reached an agreement on deescalating an economic conflict in the hopes that it will provide a path to further reducing tensions in the country. The initial agreement relates to the mutual reversal of bank sanctions and restoration of banking licenses, as well as the return of seized airplanes to the national airline.

The UN hailed the agreement as a first step toward a nationwide ceasefire and expressed its willingness to work with all parties on implementation of the agreement, the completion of which it credited to mediation by Saudi Arabia.

In a statement issued via government media channels, Saudi Arabia said it welcomed the agreement and hopes to reach a “comprehensive political solution” to the conflict. Egypt says it views the agreement as a first step to implementing a UN arms embargo and ensuring the free flow of humanitarian assistance to Yemen, and also said it would study the possibility of restoring direct flights, a step towards economic normalization.

Syria’s Assad bolsters effort toward normalizing foreign relations

Syria’s President Bashar al-Assad was in Moscow this week to discuss with Russian President Vladimir Putin a possible rapprochement and normalization with Turkey, which Russia said it’s open to mediating.

The meeting comes on the heels of Assad’s Ba’ath Party’s election victory last week, which marked another milestone in Assad’s effort to normalize post-war Syria since the country was readmitted to the Arab league in May 2023. The elections, tightly managed and according to some experts predetermined, notably excluded the rebel-held northwest and the Kurdish-held northeast 

Adding to the series of recent wins for Assad’s regime are reports that a group of European leaders is urging the EU to adopt a more “active, outcome-driven, and operational Syria policy.”

Europe 

Ukraine debt restructuring could save it $11bn  

Ukraine has reached a landmark agreement with international bondholders to restructure approximately $20 billion of debt, marking a significant milestone in Kyiv’s efforts to leverage private capital for its ongoing war effort against Russia, the Wall Street Journal reports. The deal has garnered support from investors to reduce the face value of the debt by more than a third, paving the way for a formal restructuring in the coming weeks.

The restructuring agreement will replace a two-year moratorium on bond payments that was set to expire next month. Under the terms of the deal, bondholders will write off 37 cents per dollar of the old debt in exchange for new bonds with varying interest rates and maturities. This arrangement is expected to slash Ukraine’s previously scheduled bond payments by more than $11 billion, or 90%, over the next three years, providing crucial financial relief to the war-torn nation.

The IMF has endorsed the deal, which is also backed by key allies including the US and UK. While a full return to bond markets is unlikely as long as the conflict persists, the restructuring could open doors to alternative sources of private funding, such as loans guaranteed by development banks.

Russian economy overheats as consumer spending surges

Russia’s economy is experiencing an unexpected consumer spending boom, driven by surging military expenditure and a tight labor market, the FT reports. Real wages have grown by nearly 14%, while consumption of goods and services has increased by around 25%, according to state statistics.

This economic resurgence stands in stark contrast to earlier predictions of a downturn following Western sanctions.

Russia’s defense sector has become a primary economic driver, with war-related spending increasing from 23% to almost 40% of the government’s budget. This has led to significant wage increases across various sectors, particularly benefiting blue-collar workers and those in the military-industrial complex.

Overall, government spending has surged 20% compared to pre-war levels. However, inflation has accelerated, prompting the central bank to raise interest rates to 18%, and labor shortages are widespread, with the defense sector alone lacking about 160,000 specialists. 

Latin America

Investors sour on Argentina’s Milei as Fitch warns default is likely

Argentina appears to be sliding back into the kind of economic short-termism that defined previous Peronist and pro-business governments alike, the FT reports. Recent measures by President Javier Milei to stabilize a collapsing peso have sparked a painful market backlash against a perceived softening in his reformist resolve. 

Milei’s plan to tighten rules on money printing and use scarce foreign currency reserves to buy pesos on the parallel market triggered a sharp decline in the stock market, and dollar-denominated sovereign bonds fell substantially. Critics say the new measures, prompted in part by the peso’s reaching a record low of almost 1,500 to the dollar, raise concerns about the government’s ability to build up foreign currency reserves and lift currency controls.

Fitch Ratings has warned that Argentina is likely to restructure or default on its foreign-currency bonds, despite Milei’s assurances to honor upcoming maturities, Mercopress reports. The credit rating firm also highlighted uncertainty around the level of Argentina’s reserves, particularly after some of its gold was shipped abroad, and questioned the sustainability of the 2% monthly crawling peg, given the country’s negative net reserves. 

What We’re Reading

Nigerian lawmakers approve 70% windfall tax on banks’ forex gains (Bloomberg)

Nigeria’s police chief warns against Kenyan-style protests (Reuters)

Sudan rebel leader to attend US-mediated ceasefire talks in Switzerland (AP)

Kenya seeks waiver from IMF after missing revenue targets (The Africa Report)

Ethiopia ‘approves country’s first securities exchange’ (Ethiopian Capital Market Authority)

UN seeks $136mn for drought-stricken Malawi (UN News)

South Africa passes landmark climate law (Mail and Guardian)

African nations turn to gold to protect against currency losses (Bloomberg)

Sri Lanka cuts rate to bolster growth while price gains slow (Bloomberg)

Pakistan under pressure to renegotiate hefty Chinese power deals (Nikkei)

Pakistan delays bidding for state airline (Bloomberg)
Vietnam weighs succession after death of top leader (SCMP)

Vietnam credit growth accelerates as economic recovery picks up (Bloomberg)

Myanmar military leader becomes acting president (CNN)

Thailand-Laos train, built by China, begins service (Nikkei)

Indonesia launches online system to track nickel and tin processing (Jakarta Post)

Malaysia and Singapore boost ties with rail line, special economic zone (Nikkei)

US Secretary of State visits SE Asia, Japan, Mongolia (NYT)

BlackRock hit by $17bn Asia-Pacific outflows (FT)

Oman resolves tax impasse (Al Arabiya)

Kuwait looks to increase oil production after “giant” 3.2 billion barrel discovery (Reuters)

Saudi Arabia eyes $100bn bet on shale gas revolution at home (Nikkei)

Saudi Arabia to host World Snooker Masters (World Snooker Tour Press Release)

Turkey pays down debt to Saudi Arabia (FT)

NATO to open liaison office in Jordan, its first in the Middle East (NATO Press Release)

Fitch Ratings affirms Lebanon at “Restricted Default” and withdraws from further coverage (Fitch)

Lebanon extends offshore licensing round deadline (Oil and Gas Journal)

Hungary quietly takes €1B loan from Chinese banks (Politico)

Bolivia’s YPFB to invest $400mn in new hydrocarbon exploration and development (EnergyConnects)

Bolivian government moves to halt currency slide (Mercopress)

Venezuela’s Maduro faces tough challenge at the polls (WSJ)

Venezuela: Hugo Chávez’s birthplace has had enough of his revolution (FT)

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.