I'm less worried about oil going to $100-150/bbl than I am about fuel shortages
Countries whose "strategic reserves" barely exist, at 2-4 weeks or less, are usually low income and vulnerable
A big SPR release by OECD countries won't easily resolve this (wrong place/wrong type of oil)
I'm less worried about oil going to $100-150/bbl than I am about fuel shortages
Countries whose "strategic reserves" barely exist, at 3-4 weeks or less, are usually low income and vulnerable
A big SPR release by OECD countries won't easily resolve this (wrong place/type)
Even in Bahrain - seemingly everyone in EM is sure it should trade wider as the weakest Gulf credit with lots of long-term issues, very high debt to GDP, etc. Yet its long-term debt is back under a spread of 300bps today.
One of the biggest issues from this Iran attack comes from the decision to decapitate the leadership of a country. The tacit understanding not to target leaders means the world has largely avoided tit-for-tat state sponsored assassinations of our leaders. Now, running for office carries higher risk
I heard about 5-6 factories talking about it .. but I don't know if anyone actually did because of AGOA uncertainty. Since that renewal, I think those factories were likely to move. Now I suspect they won't
Disagree with this. Kenya and other (especially textile) African exporters to the US had won a big relative advantage as Trump imposed much higher tariffs on Asia.
Factories were wanting to locate to AGOA countries with better access to the US
That advantage has now been lost
Useful piece on what comes next after the Supreme Court struck down many of Trump's tariffs
blog.freshfields.us/post/102mig3...
Any book that doesn't look at interest rates (and many development economics books don't) is going to miss some crucial stuff .. quick review here
substack.com/@timetravell...
Agreed. The one extra point I'd make from the Time Travelling Economist thesis, is that old countries have high savings and low interest rates, so can back innovation, while young countries (mostly in Africa) have low savings and pay high rates, as you'd expect in countries with a teenage median age
This requires the double demographic dividend, as explained in The Time Travelling Economist, which in turn needs high adult literacy. Substack post here substack.com/@timetravell...
Having read How Africa Works, my thread on the other place shows where I agree and disagree with his interesting book
But perhaps it's best summed up by this chart
The Time Travelling Economist explains why Morocco is industrialising and many in SSA aren't (yet)
How Africa Works does not
Commodities are not the solution for east Africa. Populations are mostly too big to make a nation rich, even if they export critical minerals, rare earths, copper or cobalt. When population size was smaller, high commodity prices were more helpful. But still any gain is preferable
Africa's trade take off will come with industrialisation, as happened in Asia.
In 1950, China and Korea exported $13 and $15 per person, per year.
In 2024, $2,510 and $13,212
Even with the EAC, 2024 east Africa is sub-$300 (next post)
(Claude in Excel will be blamed for errors :-))
Sorry, last reply got cut short. It’s going to be v interesting. If they do a 5 year, with similar ratings to Kenya, better debt/GDP ratios, and an IMF deal with small fiscal deficit, they could argue for very nice yield .. might save the target for a pitch to the finance ministry though 😀
Timing is related to this chart .. spreads over US are very tight (good) for borrowers
hhttps://bsky.app/profile/duncanlamont2.bsky.social/post/3mcz36ga6nc2fe
DR Congo is planning to issue a $750m Eurobond in April, a debut for the country.
High copper prices and adherence to IMF programme are helpful.
I’ve been in debate for some months about where this Eurobond will come, in terms of yield.
#DRC #eurobond #frontiermarkets
Nedbank has put in an offer to one of Kenya's bigger banks NCBA, which Standard Bank was expected to buy. FDI of 0.6% of GDP.
South Africans appear to recognise the conclusions of the Time Travelling Economist, that Kenya will be the next country to industrialise in SSA (the first since Mauritius)
😂
There are no bears left on gold forecasts. They've all given up.
The median forecast for Dec-2026 is now 30% above the extreme record gold price in 2025, which is the highest we've ever seen
This despite world peace for 39 of the top 40 economies and globally low inflation
Odd
South Africa is getting its mojo back
Total vehicle sales the highest since the boom year of 2007 (SA had 49m population then vs 64m now).
This is good news even though SA is no longer Africa's biggest producer
Morocco (see The Time Travelling Economist for why) has taken first place
Mozambique's opposition leader VM7 makes a good point. The dominant political parties (the old liberation movements) are facing severe challenges across southern Africa
This hints at why he backed down in 2024/25. He's playing the long game, earning trust of incumbents
www.ft.com/content/b13a...
This is excess labour (“disposables” says the Russian), probably from Uganda, finding jobs via emigration
The Time Travelling Economist thesis shows up even in Putin’s invasion of Ukraine
This can only feed the gold narrative
(even if the gold price is more about central bank buying and speculation)
Trump must be angry that the Fed won’t cut rates in January and help him (try and) win the mid-terms
🤣
What a great year for Frontier markets and Africa in particular
Nigeria stock market up 67% in $
Egypt 55%
Kenya 51%
Morocco 45%
And all of them except Morocco are still cheap in p/e terms.
US under Trump left far behind, up just 18%.
(Latam numbers might change in next few hours)
More on the UAE interest, this time in the tech space, via this Observer article
bsky.app/profile/pati...
The freeing up of currencies in Egypt, Nigeria and Ethiopia have made them plausible FDI targets again.
Portfolio investors have already profited from the better backdrop and are the pathfinders for FDI.
Meanwhile, Gulf interest is booming in Africa, from mining to logistics to energy
It is just incredible that the people who always go on about immigration and muslims and sharia law in Britain are the first to promote British immigration into a muslim country with sharia law.
I might finally understand all the media attention on the UK budget in recent months
UK political class terrified of another Truss event, so they leak every possible tax rise and change not recognizing how damaging to sentiment this is
The leakers will think they won because mkt didn't melt down
Another coup, for the reasons explained in The Time Travelling Economist
Poor education and high fertility means low per capita GDP growth so no reason to back the status quo
