Connect with us

Government

JPMorgan Says Ramaphosa No Magic Bullet for South Africa

Published

on

Cyril Ramaphosa
  • JPMorgan Says Ramaphosa No Magic Bullet for South Africa

Investors cheering Cyril Ramaphosa’s victory in South Africa’s ruling-party elections may be getting ahead of themselves.

The reformist agenda of Ramaphosa does have the potential to help accelerate economic recovery, avoid a credit-rating downgrade and strengthen the currency, according to money managers including Credit Agricole CIB and JPMorgan Chase & Co. Yet, markets aren’t factoring in the formidable challenges that could limit progress, they say.

The rand headed for its biggest two-day gain since 2015 and the benchmark equity gauge rebounded from a three-week losing streak. That optimism could prove overdone if the traditionalist faction of the African National Congress challenges Ramaphosa’s win or President Jacob Zuma’s supporters hinder the new leader’s program.

“The market is getting ahead of itself,” says Guillaume Tresca, a Paris-based strategist at Credit Agricole. “First, Zuma could remain president until 2019, which means there is a risk of negative political noise. Second, there could be a balance of power to keep the unity of ANC, so it could be less positive than earlier thought.”

Other investors expressed similar views before Ramaphosa’s election was formally declared:

cheering Cyril Ramaphosa’s victory in South Africa’s ruling-party elections may be getting ahead of themselves.
  • Sonja Keller, strategist at JPMorgan, Johannesburg:
    • “Financial markets probably would anticipate Moody’s holding off on a ratings downgrade in March next year. If the election results in a mixed slate with the top six new ANC leaders drawn from both the modernist and traditionalist camps, such expectations could be muted or indeed absent.”
  • Burkhard Varnholt, deputy chief investment officer of Credit Suisse Group AG, Zurich:
    • “They need to re-install a strong and credible finance minister and monetary policy. Those were always the hallmarks of South Africa’s economic policy. South Africa has certainly lost a lot of its punching power in recent years under the Zuma government, and most of that is most probably behind us.”
    • “It’s now about liberalizing again, cutting red tape, improving governance. There is too much corruption and all of that needs to be cut, and then South Africa can become the darling of Africa investors again as it once was. The crucial element in that equation should be the rand, which has suffered greatly and should encourage investors to move money back into the economy.”
  • Nigel Rendell, senior analyst at Medley Global Advisors, London:
    • “He’s not the answer to all of South Africa’s problems. The government needs to reverse corruption that has impacted the nation over the past 10 years.”
  • Julian Rimmer, an emerging-markets trader at Investec Bank Plc, London:
    • “The very fact of his paying lip service to the right things would give investors confidence.”
    • But, “one has to be pragmatic and the best one can hope for is a positive trend in government and economic stewardship. The chances of South Africa looking like a first-class liberal market democracy 12 months from now, fully transparent with no whiff of corruption or wasteful spending is fanciful.”
  • Paul McNamara, fund manager at GAM U.K. Ltd., London:
    • “We’ll see the rand move fairly sharply weaker not least because it has strengthened quite a lot in the last few sessions on the view that Mr. Ramaphosa is going to win. I think the point is more that he is not Mrs Zuma rather than that he has some fantastic agenda.”
  • Simon Quijano-Evans, strategist at Legal & General Investment Management, London:
    • “Politicians are under pressure to change and they are getting a reaction not just form the local electorate, but from markets. It will be pressure from both those angles that will force change.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading
Comments

Government

Netanyahu Stands Firm as US Halts Bomb Shipment Over Rafah Invasion Warning

Published

on

Netanyahu

Amidst escalating tensions between Israel and the United States, Israeli Prime Minister Benjamin Netanyahu has adopted a defiant stance following the US decision to halt a shipment of bombs and warned against Israel’s potential invasion of the southern Gaza city of Rafah.

In a bold statement, Netanyahu declared, “If we have to stand alone, we will stand alone,” emphasizing Israel’s resolve to pursue its objectives despite opposition.

The Prime Minister’s comments, delivered via social media and a subsequent interview with American talk show host Dr. Phil, underscore Israel’s determination to address security threats posed by the Gaza Strip, particularly by Hamas militants operating in Rafah.

Netanyahu reiterated the necessity of military action in Rafah to eliminate the remaining Hamas battalions, condemned Hamas’s history of violence and reiterated Israel’s commitment to achieving victory and ensuring the safety of its citizens.

The US administration, led by President Joe Biden, expressed concerns over the potential humanitarian impact of an Israeli invasion of Rafah, prompting the decision to withhold additional offensive weapons shipments to Israel.

Biden’s statement echoed broader international apprehensions about the escalation of violence and civilian casualties in the conflict-stricken region.

However, Netanyahu remained resolute in Israel’s approach, asserting the country’s right to defend itself against security threats. He emphasized Israel’s efforts to minimize civilian casualties and facilitate the evacuation of civilians from Rafah before any military action.

Despite the US’s decision to pause the bomb shipment, Netanyahu affirmed Israel’s commitment to its longstanding alliance with the US. He acknowledged past disagreements between the two nations but expressed optimism about resolving current tensions through dialogue and cooperation.

In response, White House officials reiterated the US’s support for Israel’s security while urging restraint and emphasizing the need to avoid actions that could exacerbate the humanitarian crisis in Gaza.

The administration clarified that the decision to halt the bomb shipment was aimed at preventing potential civilian casualties in Rafah.

The confrontation between Israel and the US underscores the complexity of navigating regional conflicts and balancing strategic interests. As tensions persist, both nations face the challenge of reconciling their respective security imperatives with broader humanitarian concerns, seeking to avert further escalation while addressing the root causes of the conflict in the Middle East.

Continue Reading

Government

EFCC Declares Former Kogi Governor, Yahaya Bello, Wanted Over N80.2 Billion Money Laundering Allegations

Published

on

Yahaya Bello

The Economic and Financial Crimes Commission (EFCC) has escalated its pursuit of justice by declaring former Kogi State Governor, Yahaya Bello, wanted over alleged money laundering amounting to N80.2 billion.

In a first-of-its-kind action, the EFCC announced Bello’s wanted status in connection with the alleged embezzlement of funds during his tenure as governor.

The commission, armed with a 19-count criminal charge, accused Bello and his cohorts of conspiring to launder the hefty sum, which was purportedly diverted from state coffers for personal gain.

The declaration of Bello as a wanted fugitive came after a series of failed attempts by the EFCC to effect his arrest.

Despite an ex-parte order from Justice Emeka Nwite of the Federal High Court, Abuja, mandating the EFCC to apprehend and produce Bello in court for arraignment, the former governor managed to evade capture with the reported assistance of his successor, Governor Usman Ododo.

This latest development shows the challenges faced by law enforcement agencies in holding powerful individuals accountable for their actions.

However, it also demonstrates the unwavering commitment of the EFCC to uphold the rule of law and ensure that justice is served, irrespective of the status or influence of the accused.

In response to the EFCC’s declaration, the Attorney General of the Federation and Minister of Justice, Lateef Fagbemi, issued a stern warning to Bello, stating that fleeing from the law would not resolve the allegations against him.

Fagbemi urged Bello to honor the EFCC’s invitation and cooperate with the investigation process, saying it is important to uphold the rule of law and respect the authority of law enforcement agencies.

The EFCC’s pursuit of Bello underscores the agency’s mandate to combat corruption and financial crimes, sending a strong message that individuals implicated in corrupt practices will be held accountable for their actions.

Continue Reading

Government

Concerns Mount Over Security as National Identity Card Issuance Shifts to Banks

Published

on

NIMC enrolment

Amidst the National Identity Management Commission’s (NIMC) recent announcement that the issuance of the proposed new national identity card will be facilitated through applicants’ respective banks, concerns are escalating regarding the security implications of involving financial institutions in the distribution process.

The federal government, in collaboration with the Central Bank of Nigeria (CBN) and the Nigeria Inter-bank Settlement System (NIBSS), introduced a new identity card with payment functionality, aimed at streamlining access to social and financial services.

However, the decision to utilize banks as distribution channels has sparked apprehension among industry stakeholders.

Mr. Kayode Adegoke, Head of Corporate Communications at NIMC, clarified that applicants would request the card by providing their National Identification Number (NIN) through various channels, including online portals, NIMC offices, or their respective banks.

Adegoke emphasized that the new National ID Card would serve as a single, multipurpose card, encompassing payment functionality, government services, and travel documentation.

Despite NIMC’s assurances, concerns have been raised regarding the necessity and security implications of introducing a new identity card system when an operational one already exists.

Chief Deolu Ogunbanjo, President of the National Association of Telecoms Subscribers, questioned the rationale behind the new General Multipurpose Card (GMPC), citing NIMC’s existing mandate to issue such cards under Act No. 23 of 2007.

Ogunbanjo highlighted the successful implementation of MobileID by NIMC, which has provided identity verification for over 15 million individuals.

He expressed apprehension about integrating the new ID card with existing MobileID systems and raised concerns about data privacy and unauthorized duplication of ID cards.

Moreover, stakeholders are seeking clarification on the responsibilities for card blocking, replacement, and delivery in case of loss or theft, given the involvement of multiple parties, including banks, in the issuance process.

The shift towards utilizing banks for identity card issuance raises fundamental questions about data security, privacy, and the integrity of the identification process.

With financial institutions playing a pivotal role in distributing sensitive government documents, there are valid concerns about potential vulnerabilities and risks associated with this approach.

As the debate surrounding the security implications of the new national identity card continues to intensify, stakeholders are calling for greater transparency, accountability, and collaboration between government agencies and financial institutions to address these concerns effectively.

The paramount importance of safeguarding citizens’ personal information and ensuring the integrity of the identity verification process cannot be overstated, especially in an era of increasing digital interconnectedness and heightened cybersecurity threats.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending