Dear Reader,

I am delighted to announce a new addition to FMN’s editorial team. Washington DC-based Mariel Ferragamo has joined us to cover Africa in our weekly newsletter. Her extensive experience covering Africa will be invaluable in keeping us all abreast of the latest developments on the continent.

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

Africa

Nigeria fuel-price rise adds to cost-of-living pressure

Petrol prices jumped by 15% across Nigeria this week after state-owned oil company NNPCL ended a deal with refiner Dangote that was effectively subsidizing gasoline prices, Business Insider Africa reports. This is the second time in a month that petrol prices have risen, and the fourth time since President Bola Tinubu took office last year. 

The price rise will pile more pressure on citizens already struggling with a high cost of living—and potentially reignite mass protests similar to those that spread across the country this summer. Nigerians had already taken to the streets in Abuja earlier this month to express frustration over Tinubu’s handling of the economy. 

Protests, which have included demands that the government scrap fiscal measures that have led to some of the highest food and fuel prices in decades, have been met with brutal crackdowns by the Nigerian police on both occasions.  

Kenya set to deploy 600 more police to Haiti

Kenya’s President William Ruto said this week the additional 600 police officers he offered to send to Haiti will deploy next month, Reuters reports. Kenya is leading a multinational security force to counter surging gang violence in Haiti. 

Although some Haitians have complained the existing deployment of Kenyan officers has failed to quell the violence, Ruto maintained that this is “a battle we can win.” Last month, the UN Security Council approved extending the program’s deployment by another year.

At least 10 countries have agreed to take part in the mission and have offered about 2,900 troops. The group has been slow to amass the troops needed, however. Since the mission officially launched in June, only about 430 have been deployed to the country, all but 30 of whom hail from Kenya. 

Egypt, Eritrea and Somalia cement security pact

Egypt, Eritrea and Somalia have agreed to bolster security cooperation in the face of growing insurgency challenges in the Horn of Africa by groups such as Al-Shabaab, Al Jazeera reports. According to an Eritrean statement, the three partners agreed at a meeting in the Eritrean capital Asmara to work together to promote regional stability and fight terrorism. 

The absence of Ethiopia from the gathering fueled speculation that the three nations are building an “axis” against their neighbor, the BBC reports. 

Ethiopia angered Somalia earlier this year, forging a port-development agreement with the breakaway region of Somaliland, which Mogadishu does not recognize. Egypt has long had friction with Ethiopia over the management of the Nile River, and Eritrea has felt left out of peace talks in Ethiopia, despite having sent troops to support the Ethiopian government.  

Ethiopia’s foreign ministry brushed aside the speculation, saying the country enjoys “good neighborliness” with Eritrea despite not being invited to the discussion. 

Asia

Vietnam upgrades ties with France

Vietnam raised its relationship with France to a “comprehensive strategic partnership” during a visit by French President Emanuel Macron to the Southeast Asian nation this week, The Diplomat reports. The move comes as Vietnam, whose economy grew 7.3% year-over-year last quarter led by a 20.6% increase in electronics exports, is using its increasingly prominent role in global supply chains to grow its diplomatic presence worldwide.

• Trump Organization agrees to develop $1.5bn Vietnam resort (Bloomberg) 

Vietnamese officials followed up Macron’s visit by hosting Chinese Premier Li Qiang this weekend, with the two sides expected to sign agreements on digital payments and customs, Reuters reports. Chinese and Vietnamese leaders also met this weekend in Beijing to discuss developing “sustained, correctly oriented” bilateral ties, the China-owned Global times reports.

France is the first EU country to receive Vietnam’s top diplomatic recognition—but it is the fifth country overall to receive the upgrade in the past two years. 

As China challenge looms, Philippines and South Korea agree to deepen cooperation

The distance between Manila and Seoul is more than 1,600 miles, but the Philippines and South Korea each count China as a major security challenge. This week, that shared fear fueled a diplomatic breakthrough between the two US treaty allies.

On Monday, Philippines President Ferdinand Marcos and South Korean President Yoon Suk Yeol called for upgrading their countries’ relationship to a “strategic partnership.” Yoon, visiting Manila, agreed to provide the Philippines with some $2 billion in concessional loans for infrastructure projects, Nikkei reports.

• Marcos offers tax incentives to make defense industry more self-reliant (Philippine Star) 

Marcos said the countries agreed to the “strengthening and deepening of our cooperation in an increasingly complex geopolitical and economic environment,” Radio Free Asia reports. It was the latest move in a series of efforts by the Philippines to strengthen ties with other Asian countries. In July, the country signed a defense pact with Japan.

Middle East

Russia and Iran cement ties at Turkmenistan summit

Iranian President Masoud Pezeshkian met Russia’s President Vladimir Putin this week on the sidelines of a summit in Turkmenistan to discuss formalizing their ties, including a strategic partnership agreement they are reportedly due to sign at the BRICS meeting coming later this month in Russia, Reuters reports. The two leaders emphasized their growing economic cooperation on energy and infrastructure, as well as their commitment to a shared worldview on international affairs.

According to some analysts, Iran is likely to ask Russia for more advanced air defenses and other sensitive technologies as it looks to counter rival Israel’s qualitative military advantage. Following Friday’s meeting Russia announced it would begin launching Iranian spy satellites into orbit, a sign of growing economic and military cooperation.

Saudi Arabia offers Pakistan more economic support

Saudi Arabia this week announced that it plans to award “a significant portion” of its projected $200 billion allocation on construction and procurement contracts to Pakistan, state-owned Arab News reports. Much of the money will be spent on importing raw materials from Pakistan, which would be a lifeline to the South Asian nation as it struggles to address a chronic current account deficit and weak export sector.

The day after the announcement, in Islamabad, Pakistan’s Prime Minister Shehbaz Sharif and army chief General Asim Munir attended a ceremonial signing of $2 billion worth of MoUs between Saudi and Pakistani businesses, covering sectors including manufacturing, mining, agriculture and petroleum. The deals should help Pakistan fulfill some of the conditions attached to its recently agreed IMF bailout, including growing the country’s export base.

Oil earnings help drive Oman’s public revenue growth

A 12% increase in oil earnings pushed Oman’s year-to-date public revenues up to just under $21 billion as production broke over 1 million barrels per day, according to government statistics. The growth in revenue will help fund public spending, which is reported to have grown by 7% annually as Oman continues to invest aggressively in the tourism, infrastructure and green energy sectors.

Key investments include the Hafeet Rail Project, a jointly-owned rail link between Oman and its neighbor UAE that will connect five major ports and industrial zones and which is reported to cost around $2.5 billion. This week, the project secured a $1.5 billion project finance loan from a consortium of regional and international banks, state-owned The National reports.

Omani investments in green energy, including offshore wind and hydrogen production, have begun bearing fruit, according to the IEA Renewables 2024 report, which also suggests Oman could exceed its renewables targets, in part due to high levels of state support and low land costs in the Sultanate.

Europe

Gas spat with Slovakia clouds Ukraine’s NATO hopes

Ukraine this week reiterated that it will not renew a gas transit contract with Russia’s Gazprom, but acknowledged the pressure the move would put on Slovakia, which is heavily reliant on Russian gas, Reuters reports.

The decision risks heightening tensions with Slovakia, whose Prime Minister Robert Fico, known for his pro-Kremlin statements, has pledged to block Ukraine’s NATO membership aspirations during his tenure, which ends in 2027. However, he maintains open support for Ukraine’s EU candidacy.

• Hungary says TurkStream could help supply Europe with gas if transit via Ukraine ends (Reuters)

While Slovakia explores alternative supplies from Azerbaijan, questions remain about the feasibility and true origin of such imports. Meanwhile, Ukraine’s decision to halt Russian gas transit, while aligned with its strategic goals, carries risks, including the potential loss of transit fees. 

Russia raises stakes in battle with West for influence

Russia this week continued its push to reassert influence over its former Soviet periphery, Radio Free Europe reports. In Georgia, President Vladimir Putin’s decree simplifying visa procedures for Georgian citizens marks a clear attempt to strengthen ties, amid growing Western concerns over Tbilisi’s democratic backsliding.

The move comes as Georgia’s government faces criticism for its increasingly close relationship with Moscow, exemplified by the passage of a controversial “foreign influence” law reminiscent of Russian legislation used to suppress dissent.

Simultaneously, Moldova finds itself at the center of a geopolitical tug-of-war as it approaches crucial elections and a referendum on EU membership.

The EU this week pledged almost $2 billion in financial support as part of the West’s commitment to keeping Moldova on a pro-Europe path. However, this support is being challenged by alleged Russian interference, with Moldovan authorities uncovering a significant voter bribery scheme linked to pro-Russian interests.

Latin America

Ecuador’s energy shortages dim Noboa’s reelection hopes

The once-promising reelection prospects for Ecuador’s President Daniel Noboa have dimmed as a severe energy crisis compounds ongoing security concerns and sap public support for the president, Americas Quarterly reports.

Prolonged blackouts, stemming from drought-induced hydroelectric shortfalls, have become a significant political liability for Noboa, who just weeks ago enjoyed over 50% approval ratings. Business associations estimate each eight-hour blackout costs $96 million.

The power shortage comes as Ecuador’s economy struggles, with the IMF projecting GDP growth of just 0.1% this year.

While Noboa remains the frontrunner for the 2025 election, his lead is narrowing as rivals like Luisa González and Jan Topic gain ground. Noboa’s declining popularity could weaken his support in congress, making it more difficult for him to push through badly needed political and economic reforms.

Venezuela’s buy-now-pay-later boom

Venezuela’s economic crisis has catalyzed a surge in buy now, pay later (BNPL) services, addressing a critical gap in consumer finance where traditional credit has virtually disappeared, Caracas Chronicles reports. The country’s credit market, which collapsed to a mere $200 million in 2021, falls far short of the optimal $15 billion for an economy of its size.

In this vacuum, BNPL platforms are effectively becoming proxy credit card services in a nation where only 7% of the population has access to traditional credit cards. By offering interest-free installment plans and operating primarily through mobile apps, BNPL providers such as Cashea are tapping into a vast market of underbanked consumers while simultaneously appealing to middle-class users seeking flexible payment options.

Concerns about the long-term sustainability and ethics of BNPL services abound in developed and developing countries alike, but similar services have proven to be lifelines for economies in crisis, such as Nigeria, Argentina, Turkey and Lebanon.

On Argentina’s biggest reform, Milei blinks first

When Argentina’s President Javier Milei was running for office, his campaign used the motif of a chainsaw to emphasize the speed and severity of the reforms he was proposing. This week, however, the radical president seemed to be wielding a less radical tool as he indicated a deceleration of reforms and a more pragmatic approach that will see the much-vaunted lifting of currency controls delayed.

• Argentina lawmakers fail to overturn Milei veto of university funding cuts (Reuters)

Despite previously hinting at a mid-2024 timeline for scrapping the controls, Milei now argues that such a move is incompatible with his “regime of freedom” and will take place only when certain economic conditions are achieved, including a further drop in inflation to below 2.5% a month.

Milei made his comments in a joint interview with economy minister Luis Caputo, who suggested the government might also steer away from conventional policies to address the economy’s international competitiveness. “We believe we must gain competitiveness not by devaluing [again], which is what Argentina has always done. The solution is growing, achieving a [fiscal] surplus and lowering taxes,” Caputo told the FT.

Institutional conflict creates new risks for Colombian economy

Colombia’s President Gustavo Petro this week revealed an unprecedented plan to issue the national budget by decree, after lawmakers rejected his proposed spending increases, marking a significant escalation in this power struggle with Congress, the FT reports.

While investors initially welcomed Colombia’s divided Congress as a bulwark against Petro’s more radical legislative reforms, the political gridlock it’s created has evolved into a source of heightened institutional conflict, as the president seeks to empower the executive branch to circumvent legislative obstacles.

The move comes against a challenging economic backdrop, with GDP growth forecast at a sluggish 1.7% for 2023, persistent above-target inflation, and a depreciating peso. Petro’s decison to bypass Congress not only threatens to weaken institutional checks and balances but also signals a departure from the economic orthodoxy that has long underpinned investor confidence in Colombia.

Global

Emerging market debt advisory sees rising competition 

The traditionally clubby world of sovereign debt restructuring is experiencing a shake-up, with long dominant Lazard facing rising competition and an increasingly complex restructuring landscape, Bloomberg reports. The recent Zambian debt restructuring, which took three years to resolve, exemplifies the changing landscape: China’s growing influence as the developing world’s largest lender and the increasing assertiveness of Wall Street bondholders have complicated negotiations, stretching out timelines and intensifying competition among advisory firms.

New entrants—some led by former Lazard bankers—are disrupting the status quo, bringing fresh perspectives and aggressive strategies to a field long dominated by a small, Paris-based elite. The competition is further intensified by the massive $28 trillion debt burden facing developing nations, with $80 billion due to global bondholders from the lowest-rated countries over the next two years. 

For emerging market borrowers, the development is a double-edged sword: increased competition among advisory firms could lead to more innovative restructuring solutions and potentially better terms for debtor nations, but increasingly protracted negotiations can leave countries locked out of international markets for years.

What We’re Reading 

Africa 

Senegal pledges swift action on budget gap after ratings cut (Bloomberg)

Rwanda’s marburg disease outbreak ‘under control’ (AP)

Kenya court refers deputy president’s impeachment case to chief justice (Reuters)

Holdouts from South Sudan’s 2018 peace deal expect to sign new deal soon (East African)

South Sudan imposes levy on international aid trucks and UN peacekeepers (WSJ)

DRC wants to pivot away from China’s dominance over its mining (Bloomberg)

Zimbabwe gives tenure to farmers who benefitted from land grabs (Bloomberg)

South Africa seeks foreign investment in energy, water and infrastructure (FT)

Biden postpones long-awaited Africa trip (News24)

Donors turn deaf ear to food insecurity in Africa (Bloomberg)

Asia

Bangladeshi garment manufacturers sue British freight forwarders for millions (The Loadstar)

India offers Maldives $760mn swap line (FT)

IMF approves $265mn in climate finance for Papua New Guinea (Reuters)

Indonesia’s coal producers diversify to nickel and aluminum (FT)

Blackstone and TikTok’s parent pile into Malaysian AI boomtown (WSJ)

Kazakhstan referendum on nuclear power passes (The Diplomat)

Middle East

Iran and Oman hold joint naval drills (Press TV)

Global anti-money laundering watchdog says Kuwait faces ‘serious shortcomings’ (Reuters)

US sees opening to sideline Hezbollah politically in Lebanon (WSJ)

Saudi Arabia narrowly fails in bid to win a seat on UN human rights council (The Guardian)

Houthis strike tanker off Yemen, causing minor damage and no injuries (Reuters)

US launches airstrikes on Yemen’s Iran-backed Houthi rebels (AP)

Middle East startups see 34% uptick in global investors (Al Monitor)

Europe

EU welcomes Kosovo’s move to scrap ban on Serbian imports (BalkanInsight)

Azeri banks benefiting from reduced asset-quality risks (Fitch Ratings)

Latin America

Tanker vessels flock to Guyana as oil exports soar 58% (Marine Link)

Former gas powerhouse Bolivia faces economic crisis (Bloomberg)

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