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

Africa

South Sudan says it could soon resume pumping oil through Sudan

The leaders of South Sudan and Sudan announced this week that oil exports from the former country could soon resume through a pipeline that passes through the latter.

The infrastructure that supports these exports has come under strain from Sudan’s devastating civil war, which shows no signs of abating after fighting began 17 months ago. For the past four months, engineers have worked to repair infrastructure damaged by the conflict, BBC reports. 

But even with the proper machinery back in place, there is no guarantee that the Rapid Support Forces, which opposes Sudan’s government and controls most of the pipeline territory, will allow the exports to resume. That would be a major blow to South Sudan since oil sales make up 90% of government revenue, according to the World Bank.

Nigeria’s Dangote refinery begins selling gasoline to domestic market

Nigeria took a step closer this week to easing persistent gasoline shortages after the Dangote Refinery, a facility in the country’s southeast, started delivering petrol, France24 reports. The refinery is currently operating at just a fraction of its capacity but ultimately should refine more oil than any other plant in Africa.

Nigeria has significant deposits of oil, but few tools to refine it into pumpable gasoline. That has required businesses to import petrol from abroad, with the government shelling out billions of dollars to subsidize the costs of fuel—until Nigeria’s President Bola Tinubu reduced the subsidies shortly after taking office last year.

However, the state-owned Nigerian National Petroleum Company (NNPC) is currently selling Dangote-refined gasoline at even higher rates than imported fuel, Punch reports, leading local industry groups to warn that it could do little to bring down petrol prices.

Dangote’s refinery supplied 16 million liters of fuel last weekend, compared to a daily maximum of 57 million liters, Africanews reports. The plant expects to reach full capacity next month or the month after. For now, NNPC is the only buyer, although diesel sales will open up to other buyers in October.

Algerian president Tebboune sworn in for second term

Algerian President Abdelmadjid Tebboune was sworn in for a second five-year term on Tuesday after an election marked by irregularities.

Tebboune won more than 84% of the vote, according to recount figures affirmed by the country’s constitutional court last weekend. That figure was more than 10 percentage points less than the tally released shortly after the September 7 election. Reported voter turnout, widely viewed as pivotal for the election’s legitimacy, increased in the recount to 46.1% from less than 25% two weeks ago. 

• Algerian president delays response to PM’s and cabinet’s resignations (Reuters)

Meanwhile, the vote share received by two opposition candidates, the Islamist Abdelaali Hassani Cherif and the socialist Youcef Aouchiche, more than tripled after the recount to around 15%. Both candidates had been criticized for participating in what observers considered a stage-managed contest, AP reports. Both men attended Tebboune’s swearing in ceremony.

Asia

Bangladesh snags $2bn commitment from World Bank

The World Bank has agreed to provide Bangladesh with $2 billion to help the country’s transitional government with its reform efforts. Announcing the funding in a post on X on Tuesday, Bangladesh’s interim leader Muhammad Yunus said the money will “support critical reforms, flood response, better air quality and health.”

The multilateral is also planning to repurpose $1 billion from existing programs to provide additional funding for Bangladesh, Reuters reports, bringing the total for this fiscal year to $3 billion.

Yunus said last week that he is seeking $5 billion in aid to stabilize Bangladesh’s economy, which faced turmoil even before student-led protests ousted Prime Minister Sheikh Hasina in August and large-scale flooding inundated the country’s southeast soon thereafter. Recovering from protests has been rocky, with many police—who killed hundreds of people during summer demonstrations—still absent from work.

On Tuesday, Yunus’ government gave the army law enforcement powers, with one advisor saying “police are yet to be properly functional,” Daily Star reports.

Left-leaning leader wins Sri Lanka election

Anura Kumara Dissanayake, leader of the Marxist Janatha Vimukthi Peramuna party won this weekend’s presidential election in Sri Lanka after a historic second round of counting, the BBC reports. Dissanayake received 42.31% of the vote in the first round and his closest rival, opposition leader Sajith Premadasa, got 32.76%.

Dissanayake, who promised voters good governance and tough anti-corruption measures, emerged as winner after the second count, which tallied voters' second and third choice candidates.

Saturday’s poll was the first in the island nation since protesters ousted the dynastic Rajapaksa family from power two years ago.

Incumbent president Ranil Wickremesinghe, an independent who has led the country since its economic crisis reached a climax in 2022, won just 17% of the first-round vote.

Middle East

Saudi Arabia ups the ante for Israel normalization

Saudi Arabia’s Crown Prince Mohammed bin Salman this week dealt a setback to efforts to normalize relations with Israel, stating that the country will not formalize ties without an “independent Palestinian state with East Jerusalem at its capital,” France 24 reports.

Although Palestinian statehood has long been a condition for normalization, bin Salman’s public commitment to a Palestinian capital in Jerusalem suggests that he’s holding to the traditional Saudi position on the Palestinian question despite his reputation as a domestic reformer.

The Crown Prince has set off a tectonic shift in Saudi Arabian culture, challenging the traditional conservative establishment by liberalizing Islamic morality laws, particularly regarding women, and going as far as imprisoning dissenting hardline clerics. But this latest public affirmation of the long-held Saudi position on Palestinian statehood—despite recent normalization with Israel by the more secular UAE and Bahrain—suggests bin Salman is reluctant to move too decisively without considering the politics and values of Muslim world.

Fiscal weakness and oil market pressures slow Iran’s economic growth

Iran’s economic growth rate has halved since this time last year, domestic media report. According to the country’s central bank, growth in both the oil sector and in non-oil sectors is declining, implying broad-based weakness across Iran’s economy. 

An annual 7.3% decline in public sector spending over the past quarter suggests the government is unable to rally fiscal support to stimulate growth.

The sharp drop in fiscal spending appears to run counter to a strategy promoted by Supreme Leader Ayatollah Ali Khamanei to use public sector investment to drive non-oil economic growth. Falling oil prices, currency weakness, and the uncertainty generated by the regional conflict between Iran’s so-called Axis of Resistance and Israel appear to be preventing the government from carrying out the Ayatollah’s economic directives.

Islamist opposition gains ground in Jordan election

Islamist opposition parties in Jordan saw a sharp surge in support in this week’s parliamentary elections, helping them win the largest proportion of directly electable seats—albeit falling short of a majority, Al Jazeera reports. The Islamic Action Front (IAF), the political wing of the Muslim Brotherhood in Jordan, picked up 31 out of 138 seats in Parliament, tripling their count of just 10 seats in the previous election, held in 2020.

Murad al-Adailah, the head of Jordan’s Muslim Brotherhood, has claimed that the election was a “popular referendum” affirming the IAF’s solidarity with Hamas and Hezbollah, and for terminating Jordan’s long-standing peace treaty with, and recognition of, Israel.

Jordan, a major component of the US security coalition in the Middle East, is firmly controlled by the pro-West King Abdullah II, who is trying to delicately balance the country’s alliance with the US and Israel with the interests of its largely pro-Palestine population.

Europe

Hungarian economy at risk as EU slashes funding and key sector stalls

Long-feared risks to the Hungarian economy are crystalizing as the EU moves to slash €200 million from budget payments to the country, escalating tensions over Prime Minister Viktor Orbán’s stance on immigration and rule-of-law issues, the FT reports. The financial penalty, imposed by the EU’s top court, comes in response to Hungary’s refusal to pay fines for breaching EU asylum laws.

While Brussels has long threatened such moves, it has been hesitant to go after Budapest’s EU funds, which have made up around 3% of GDP over the past decade.

Compounding Hungary’s headwinds is a significant slowdown in its burgeoning electric vehicle (EV) and battery manufacturing sector. Orbán had bet heavily on this industry, attracting approximately $20 billion in EV-related investments since 2017. However, a sharp decline in European EV sales and brewing trade tensions with China are exposing vulnerabilities in Hungary’s economic strategy, Bloomberg reports.

The setbacks come at a critical time for Orbán’s government, with GDP contracting in the second quarter and the prospect of another recession looming.

Serbia turns to expensive commercial borrowing to fund development push

Serbia is embarking on an ambitious €17.8 billion investment program dubbed ‘Leap Into The Future’, aimed at accelerating the country’s development and establishing it as a regional leader in Southeast Europe, BalkanInsight reports. Spurred by Belgrade’s selection as the host for Expo 2027, the initiative includes major infrastructure projects such as a new national sports stadium and retail complex and improvements to road and rail networks. 

However, to finance this grand vision, Serbia is resorting to costly commercial borrowing, raising concerns about the long-term sustainability of its debt. President Aleksandar Vučić has defended the bold approach, emphasizing the need for ambitious goals to achieve significant progress, despite potential financial risks.

Latin America

Salvadoran bonds surge as Bukele clears way for IMF program

El Salvador’s bonds rallied on Monday after President Nayib Bukele announced a debt-free 2025 budget, Bloomberg reports. This move, signaling a shift toward fiscal austerity, has been interpreted by markets as a crucial step in securing a long-awaited program with the IMF.

Dollar-denominated bonds saw substantial gains across various maturities, with the 2035 notes climbing 2.2 cents to 80.5 cents on the dollar, reaching levels not seen since 2021.

Bukele’s commitment to present next year’s budget by September 30 also comes as a welcome development for investors who have been concerned about El Salvador’s ability to meet its debt obligations. The country’s adoption of bitcoin as legal tender and a lack of fiscal consolidation have been cited by the IMF as key obstacles to a potential deal. However, recent signals from the Bukele administration, including a softer stance on cryptocurrency, have led analysts to believe that an agreement may be closer than ever before.

Despite the positive market reaction, some investors remain cautious, emphasizing the need for concrete evidence of fiscal deficit reduction and clarity on the bitcoin issue. The government also faces challenges in trimming its fiscal deficit, which stood at 2.5% of GDP as of July.

Amid deepening crisis, Cuba cracks down on nascent private sector

Cuba’s communist government has implemented a sweeping set of regulations aimed at tightening control over the country’s burgeoning private sector, Reuters reports. The new measures, which include increased taxes, stricter accounting requirements, enhanced workers’ rights and restrictions on independent wholesalers, come less than three years after the legalization of private businesses following decades of prohibition.

The private sector has been a rare bright spot in a country that is suffering its worst economic crisis in recent memory, characterized by severe shortages of essential goods and a mass exodus of citizens. More than 11,350 private businesses have been approved in the past three years and the sector accounts for 25% of jobs and 15% of imports. Small retailers, who have played a crucial role in filling the void left by the state’s economic shortcomings, are expected to be hit particularly hard by new accounting hurdles and import restrictions.

• Cuba slashes size of daily bread ration as ingredients run thin (Reuters) 

While government officials assert that these measures are necessary to correct economic distortions and ensure private enterprise benefits the broader population, critics argue they will further impede economic recovery. “This is not a crusade against non-state forms of management … but rather, it brings them within the framework of legality,” economy and planning minister Joaquin Alonso Vazquez said.

Cost of living protests turn violent in Martinique

Martinique has imposed a nightly curfew in its capital following violent protests over the high cost of living, the Guardian reports. The unrest resulted in 14 deaths, injuries, property damage, and significant disruptions to local businesses.

The protesters are focusing on a stark 30-42% price disparity for food compared to mainland France, despite the island’s status as an overseas region of France.

The demonstrations reflect deeper issues of economic inequality, with concerns about the concentration of wealth among descendants of former plantation owners and the dominance of French nationals in high-ranking positions.

What We’re Reading

Africa 

Ghanaians launch nationwide protests ahead of December election (AP)

Concerns mount over Senegal fiscal shortfalls ahead of election (Reuters)

Mali, Burkina Faso and Niger to launch biometric passports under new alliance (Reuters)

US and Chad plan return of US troops (Voice of America)

Russia agrees to build pipeline in Republic of Congo (Moscow Times)

Gold-rich Sudan talks mining with Russia as war alliances shift (Bloomberg)

Kenya starts auditing national debt (Daily Nation)

Zambia risks alienating investors with critical minerals plan (The Africa Report)

Zambia leads solar shift amid southern Africa’s hydroelectric drought (Radio France International)

Zimbabwe creditors mull debt-for-climate swap to fix arrears (Bloomberg)

Traders see pain in Zimbabwe’s 28% stock surge and shaky ZiG (Bloomberg)

Botswana approves first license for manganese mining (VOA)

South Africa to launch new visa program aimed at attracting foreign workers (Africanews)

Egyptian cabinet says Saudi told PIF to pump $5bn into Egypt (Reuters)

Tunisian court sentences opposition presidential candidate to almost 2 years in prison (FT)

US’s Biden to make first Africa trip with visit to Angola (CFR)

Asia

Pakistan pledges closer economic ties with Russia as it seeks BRICS membership (Dawn)

Afghan Taliban begin enforcing another set of draconian antiwoman laws (Washington Post)

Yangon home prices surge as Myanmar war drives flight to safety (Nikkei)

‘Human rights abyss’ has emerged in Myanmar, UN says (New York Times)

Indonesia and Vietnam look to upgrade ties (The Diplomat)

Vietnam estimates typhoon losses at $1.6bn (Vietnam Investment Review)

Malaysia and Cambodia lead QR payment expansion in ASEAN (Nikkei)

ASEAN manufacturers face pressure from surge in Chinese imports (FrontierView)

Germany and Central Asian states plan closer cooperation (RFE/RL)

Middle East

How Israel built a modern-day Trojan Horse: Exploding pagers (NYT)

Saudi Arabia plans to allow tougher nuclear oversight by IAEA this year (Reuters)

S&P flags possible rating upgrade for Saudi Arabia (Bloomberg)

Iraq’s PM says ISIS defeat means US troops no longer needed (Bloomberg)

Oman’s commerce minister visits US to boost investment, trade relations (Zawya)

Oman posts first-half trade surplus of $9.4bn, driven by oil exports (Arab News)

Saudi Arabia, UAE, and Bahrain match Fed’s 50 basis point rate cut, Kuwait cuts 25bp (Bloomberg)

Gulf sukuk rally grows as fed rate cuts outweigh oil’s plunge (Bloomberg)

Europe

Hungary plans to deploy troops to Chad (DW)

IMF scraps mission to Moscow after objections from Kyiv’s allies (FT)

Rolls-Royce wins pioneering deal to build mini nuclear plants in Czech Republic (FT)

Latin America

Colombia court suspension of Uchuva-2 gas well ‘threatens energy security’ (Reuters)

Ecuador enlists military to manage dam during power crisis (Reuters)

Foreign travel to Peru surges (Mercopress)

Peru approves $1.75bn package for state oil company (Offshore Technology)

Chile’s president steers country back to tradition of moderate politics (America’s Quarterly) 

Global

Chinese deal activity shifts toward emerging markets (Nikkei)

Opinion: ‘Emerging markets’ has become a redundant term (FT)

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