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

Africa

Mozambique prepares for national elections

Citizens of Mozambique will vote in a presidential election next Wednesday that analysts view as almost certain to extend the Frelimo party’s 50-year grip on power.

President Felipe Nyusi is term-limited and will likely be replaced by Frelimo’s Daniel Chapo, Reuters reports. Chapo previously served as governor of the coastal Inhambane Province. He will be challenged by Venâncio Mondlane, the leader of the opposition Renamo party. 

The next leader of the country will have to contend with an Islamist insurgency that has threatened to derail billion-dollar energy projects that the country has been counting on to fuel future growth. After an attack by insurgents in 2021, the French oil giant TotalEnergies delayed a $20 billion project in the country.

Resuming the project will be key to avoiding a sovereign default, Capital Economics analyst Jason Tuvey wrote in a note on Friday. “It will also ensure that the government’s debt-to-GDP ratio begins to fall” and “provide a boost to Mozambique’s economy,” he wrote.

Ethiopia bondholders reject government restructuring offer

Holders of $1 billion worth of Ethiopian debt rebuffed a government restructuring proposal on Thursday that would have seen them take an 18% haircut. 

Ethiopia had proposed the writedown during an investor call on Tuesday. A group representing the bondholders told Reuters that the proposed haircut on the country’s only dollar-denominated bond was “wholly inconsistent with the Committee’s evaluation of Ethiopia’s economic fundamentals.” The creditors argue that Ethiopia’s economy is sound, despite a lack of liquidity, so a haircut is unnecessary.

• Ethiopia expects ‘tangible progress’ on deal by December (Reuters)

China owns more than half of the country’s bilateral debt, according to Reuters.

Ethiopia defaulted on the dollarbond last December, and the restructuring stalled as the country negotiated a four-year, $3.4 billion bailout package with the IMF. Last week, the country reached a staff-level agreement with the fund to unlock the first $345 million disbursement under the deal.

Ghana exits default

Ghana announced on Thursday that it would soon emerge from two years of default after finishing a restructuring of some $13 billion worth of debt, the FT reports. The country will reenter financial markets two years after it suspended payments amid an economic crisis in 2022.

Bondholders agreed to exchange the debt they held for bonds worth almost $5 billion less, the government said. The arrangement, which lowers Ghana’s debt bill by $4 billion over the next two years, cements a deal agreed to in principle in June.

“Today, our economy has turned a corner,” President Nana Akufo-Addo said in a statement.

Zambia plans sovereign wealth fund 

Zambia announced this week that it will launch a sovereign wealth fund next year to support its health and education sectors. Officials hope that it will also help ensure financial stability in a country that has only recently recovered from default. 

The fund will be backed by mining revenue in the mineral-rich Southern African nation, which is the second largest copper producer on the continent after the Democratic Republic of the Congo. It will also be backed by dividends from state-owned companies, Bloomberg reports. 

Zambia’s economy is forecast to grow by 6.6% next year, the fastest rate in more than a decade next year as a devastating drought eases, finance minister Situmbeko Musokotwane said last week. 

Asia

Myanmar to attend first major ASEAN summit since junta takeover 

Myanmar’s military government is sending a foreign ministry official to a major ASEAN summit next week—the first time a delegation from Myanmar will attend a summit of the regional bloc since the military took power in a coup almost four years ago.

ASEAN had responded to the coup by restricting Myanmar’s participation in bloc events, and the junta government skipped many in protest. But frosty relations began to thaw in July, when Permanent Secretary of Myanmar’s Foreign Ministry Aung Kyaw Moe took part in an ASEAN foreign ministers’ meeting. He will also represent Myanmar at the summit in Laos’ capital Vientiane next week.

The conference is likely to focus on Myanmar’s efforts to end the country’s civil war. The military government has grown increasingly willing to negotiate with ASEAN as the costs and casualties from the conflict mount, Nikkei reports. 

Cambodia arrests journalist who exposed scams connected to elites 

Cambodian officials arrested a journalist this week who had revealed human trafficking in scam centers, the New York Times reports. The reporter, Mech Dara, had also written about links between the centers and Ly Yong Phat, a wealthy businessman and senator who advises Prime Minister Hun Manet. 

Mech Dara’s coverage exposed schemes in which people were lured to compounds with the promise of a job, only to be threatened with torture if they did not agree to participate in online scams. On Tuesday, prosecutors charged him with “incitement to provoke serious social chaos.”

The charges follow sanctions placed by the US last month on Ly Yong Phat, who the treasury department said was involved with “extensive and systemic serious human rights abuse.” If convicted, Mech Dara faces two years in prison, CNN reports.

Southeast Asia flooding causes billions in damage 

Recent flooding in Southeast Asia is estimated to have caused at least $5 billion in damage, as countries throughout the region tally the destruction wrought by Typhoon Yagi. 

Authorities in Vietnam, where the typhoon made landfall last month, said damages could reach $3.3 billion, Reuters reports. The storm destroyed factories and homes and caused mass flooding across much of the country. Last week, ratings firm S&P projected that the typhoon damage would squeeze Vietnamese bank profits, as financial institutions comply with the central bank’s debt relief orders.

In Thailand, banks expect the flooding will cause some $1.4 billion in damage this year, Nikkei reports. Destruction is concentrated in the country’s north, where an official with the Chiang Rai Chamber of Commerce said it could take up to six months to financially recover. 

Middle East

Saudi growth expected to bounce back after 2024 slump

Saudi Arabia’s government is expecting economic growth to rise sharply next year after plunging to just 0.8% this year, according to a pre-budget statement from the finance ministry. Total GDP growth for 2024, inclusive of oil, has been revised downwards from an earlier 4.4% forecast, and projections for 2025 are revised to 4.6% with “acceptable levels” of inflation.

• Saudi Arabia threatens price war as OPEC+ members flout production curbs (WSJ)

The 2025 GDP numbers are contingent on baseline assumptions of robust non-energy sector growth, which the ministry expects to pick up the slack from losses due to weakening demand and lower export prices as the Kingdom ramps up oil production to compete for more market share.

Saudi Arabia’s fiscal balance will also deteriorate, with the finance ministry estimating deficits of 2.3% of GDP in 2025 and 2.9% in 2026—slightly worse than the IMF’s projections in its annual review in September—due to “expansionary spending policy intended to support economic growth” and Vision 2030 projects. 

UAE bans more sanctions-evading “shadow vessels”

The UAE this week continued its efforts to crack down on sanctions-evading “shadow fleets” operating from its ports and near its territorial waters, banning and de-flagging an additional 22 transport vessels for their involvement in the illegal oil trade. Since Russia’s invasion of Ukraine in February 2022, the US has led efforts to sanction the transport and sale of Russian oil by targeting vessels, brokers and buyers, and by imposing an internationally-enforced price cap. 

Russia has been able to partly evade those sanctions by employing techniques such as ship-to-ship transfers of oil, which involves obscuring the origins of the cargo by moving sanctioned oil from one vessel to another, and by sourcing uninsured, internationally-flagged vessels outside the scope of sanctions enforcement.

This week’s move is the latest by the UAE in the cat-and-mouse game of sanctions evasion, following its earlier wholesale ban on Cameroonian vessels extensively used by Russians, and a crackdown on unlawful ship refueling practices in its waters.

Oman Future Fund raises $2.2 billion

Oman Future Fund, a $5.2 billion investment vehicle targeting domestic industries and SMEs, this week announced its first round of investments totaling 830 million OMR, or around $2 billion. Some 600 million OMR was reportedly foreign direct investment, with the remainder covered by the Oman Investment Authority and other local sources.

The investments will primarily target green energy projects, most notably a polysilicon factory operated by United Solar with a target 100,000 ton production capacity. The second largest investment recipient is the IDG Oman Investment Fund, a partnership with a Chinese FDI vehicle that is aiming to expand China-originated communications, renewable energy and electric vehicle projects in Oman.

Europe

Extreme weather threatens Romanian agriculture

Romania is grappling with the severe impacts of climate change on its farming industry, with €2 billion in related losses expected this year, Bloomberg reports. The country is one of Europe’s largest corn exporters and home to about a third of all EU farms, which employ over a fifth of the country’s workforce.

• Romania’s economic outlook sees sharpest correction among EBRD countries (Romania Insider)

• Romania’s stock market among top performers in Europe (Romania Insider) 

In response to the risk of desertification in the fertile south, the government is reviving large-scale irrigation projects, including the ambitious Siret-Baragan canal. With an estimated cost of €5.5 billion, this 191-kilometer channel could safeguard thousands of hectares of arable land from drought but the project faces skepticism and funding hurdles. Work on a 33-kilometer section is scheduled to begin in early 2025.

As traditional farming practices become increasingly untenable, some regions are exploring innovative solutions. The town of Buzau, for instance, is preparing to test a system using reclaimed water from sewage systems for irrigation, and elsewhere in the country farmers are adapting their crop choices and irrigation methods to mitigate risks. 

Serbia seals UAE economic partnership 

Serbia and the United Arab Emirates have agreed to a Comprehensive Economic Partnership during a visit by UAE President Sheikh Mohamed to Belgrade, the National news reports. The landmark agreement, overseen by Sheikh Mohamed and Serbian President Aleksandar Vucic, aims to boost trade, investment and private sector collaboration.

The partnership is part of the UAE’s effort to diversify its economic ties and establish a robust network of trade agreements globally, and is its first such agreement with a non-WTO member. The deal is set to eliminate up to 96% of customs tariffs, potentially surpassing the scope of previous deals with WTO members.

The agreement comes just weeks after Serbia formed a similar partnership with Israel. While Belgrade has chilly relations with the EU, it is building stronger links with China and Russia—and now Middle Eastern countries. 

While the partnership focuses primarily on enhancing economic ties, the strengthened relationship could lead to collaboration to address climate-related challenges as Serbia faces extreme weather conditions that have severely reduced agricultural yields.

Latin America

Suriname explores carbon markets as oil investment flows

Suriname is pioneering the sale of United Nations-verified sovereign carbon credits, potentially kick-starting a global market that the UN hopes will be worth some $50 billion, Bloomberg reports. The South American nation is hoping to raise $45 million initially, with carbon credits potentially priced at up to $30 per ton of CO2—a significant premium over current voluntary market rates.

The initiative, spearheaded by the Coalition for Rainforest Nations NGO, comes as Suriname witnesses a boom in oil investment. This week TotalEnergies and APA announced $10.5 billion in investment for offshore development. With production expected to commence in early 2028, Suriname is positioning itself to emulate the success of neighboring Guyana.

Suriname will demand that oil companies offset their emissions by purchasing carbon credits based on preservation of the forests that cover some 90% of the country. The government is also implementing a legal framework for its oil sector to secure higher revenues through increased royalties, taxes and signing bonuses, with plans to reinvest these funds in healthcare and local development.

As other emerging markets consider similar initiatives, Suriname’s experiment could set a precedent for how resource-rich nations balance economic development and environmental preservation. 

IMF pushes El Salvador to narrow cryptocurrency support amid loan negotiations

El Salvador’s adoption of bitcoin as legal tender continues to be a point of contention in its negotiations with the IMF for a potential funding program, CrypoSlate reports. The multilateral is pressuring the Central American country to narrow the scope of its bitcoin law and strengthen regulatory oversight, citing concerns over financial risks associated with cryptocurrency adoption. 

El Salvador’s economy has been growing recently, partly on the back of increased tourism, but the IMF remains cautious about bitcoin’s long-term impact on financial stability. The ongoing discussions aim to create a policy framework that balances El Salvador’s commitment to bitcoin with the IMF’s concerns about governance and public finances. 

What We’re Reading

Africa  

Senegal opposition appoints former President Macky Sall as leader ahead of national elections (Africanews)

World Bank approves $1.6bn Nigeria loan (Bloomberg)

Nigeria proposes new tax incentives to attract gas investors (Bloomberg)

Equatorial Guinea and Gabon face off at the ICJ over oil-rich islands (Radio France International)

IMF reconsiders loan terms for Kenya as court blocks reforms (The Africa Report)

Uganda sets up state-owned firm to take stakes in mining operations (Reuters)

Zimbabwe compensates farmers over land invasions (Reuters)

South Africa yields hit 2-year low as economy turns a corner (Bloomberg)

Libya approves new central bank governor, prepares to resume oil exports (OilPrice)

ECJ rules EU-Morocco trade deals invalid in Western Sahara (Reuters)

African nations collaborate on $2bn debt-for-nature plan for ocean protection (Africa Confidential)

Asia 

Chinese pressure grows on Malaysia’s South China Sea oil exploration (CSIS)

Malaysia wins $6.5bn investment from Oracle (WSJ)

Thailand kicks off bumper cash handouts to boost ailing economy (FT)

Google to invest $1bn in Thai data center (CNBC)

US sets preliminary new duties on solar imports from Southeast Asia (Reuters)

Kazakhstan to vote on construction of nuclear power plant (RFE/RL)

Bangladesh textile factories reopen (Reuters)

Pakistan, following India, removes restrictions on rice exports (Al Jazeera)

Nepal to ‘send more skilled workers to Japan’ (Nikkei)

Nepal aims for Asia’s luxury tourism list (Nikkei)

Middle East 

Oman ‘wants to boost cooperation’ with Russia (Interfax)

Jordanian government faces backlash for defending Israel (Middle East Eye)

Turkey and Iraq sign agreement on migration management (Anadolu Agency)

UAE to invest $23bn in low-carbon energy solutions (Nikkei)

Europe

Slovakia’s proposed revenue measures underscore fiscal consolidation efforts (Fitch)

Moldovan oligarch offers money for votes against EU integration (BalkanInsight)

Russian defense spending to rise by a quarter in 2025 (FT)

Russian advance in Ukraine exposes Kyiv’s critical vulnerabilities (CNN) 

Latin America

Colombia cuts key interest rate to a two-year low (Bloomberg)

Venezuela’s oil exports plunge (Reuters)

Bolivia stops gas sales to Argentina and shifts toward Brazil (Mercopress)

Milei wants Argentines to dollarize the economy for him (Bloomberg)

Latin America gears up for clean hydrogen boom (Reuters)

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