Politics, Economics and Risk in Africa
Summary
TLDRIn this insightful discussion, Ronan, a director of Signal Risk, explores the intersection of politics, economics, and risk management in Africa. With 20 African countries facing elections, he addresses the uncertainty and anxiety surrounding these events, their impact on local and intra-African businesses, and the importance of policy predictability for investors. Ronan also touches on the challenges faced by Nigeria and South Africa, two key economies, and the role of digital democracy amidst the rise of social media and internet shutdowns.
Takeaways
- 🌐 The guest specializes in translating the intersection of politics and economics into actionable insights for commercial decision-makers in Africa.
- 🗳️ Approximately 20 African countries are going into elections, which brings anxiety and uncertainty affecting local and intra-African businesses.
- 📉 Investors are concerned about potential fiscal slippage, currency impact, corruption, violence, and internet shutdowns during elections.
- 🔄 The narrative of straightforward African elections is changing with examples like Kenya's annulled election and the DRC's manipulated outcome.
- 🇳🇬🇿🇦 For pan-African players, Nigeria and South Africa are crucial economies but have been performing below expectations for the past five years.
- 🇳🇬 In Nigeria, regulatory policy predictability and business-friendliness of the administration are significant concerns for investors.
- 🇿🇦 In South Africa, the new president's ability to consolidate power and gain a mandate for his reform agenda is a key focus for investors.
- 💡 The desire for a stable and predictable regulatory environment is a common theme among investors in African markets.
- 📱 The role of digital democracy has evolved from a force for good to one that can exploit divisions and create polarization.
- 🌐 Internet shutdowns as a response to elections and social unrest are becoming more common, raising questions about their impact on society and governance.
Q & A
What is the primary focus of Ronan's work?
-Ronan focuses on the intersection of politics and economics, translating complex information into digestible insights for commercial decision-makers.
How does Ronan's work help in anticipating events?
-Ronan's work simplifies complex information to help businesses react to events and anticipate future occurrences, providing a stable and predictable environment for decision-making.
What are the common concerns during elections in Africa?
-Common concerns during African elections include fiscal slippage, currency impact, corruption, violence, internet shutdowns, and the overall uncertainty that can disrupt business operations.
Why are smooth transitions of power important for investors?
-Investors prefer certainty and minimal disruption; smooth transitions of power allow them to continue investing and conducting business in a stable and predictable environment.
What are the key issues in Nigeria that investors should be cautious about?
-In Nigeria, investors should be cautious about regulatory policy predictability, business-friendliness of the administration, currency and liquidity issues, and security concerns.
How has the new president's impact been in South Africa?
-The new president in South Africa has been in power for about a year, but the honeymoon phase is over. The upcoming elections will show the level of support for his reform agenda.
What is the role of digital democracy in the context of South Africa?
-Digital democracy, initially seen as a force for good, has been exploited to create polarization and societal fractures. The role of digital platforms in governance and society is becoming increasingly complex.
How have internet shutdowns in Africa impacted society and governance?
-Internet shutdowns in Africa have been used as a tool to control information flow and suppress opposition, leading to concerns about democratic processes and freedom of expression.
What are the implications of elections on local and intra-African businesses?
-Elections can lead to uncertainty and anxiety, affecting local and intra-African businesses through potential policy changes, economic instability, and disruptions in the business environment.
What is the current state of the economies in Nigeria and South Africa?
-Both Nigeria and South Africa have been performing at subpar levels for the last five years, with issues related to policy predictability, economic stability, and investor confidence.
How can investors approach the uncertainty surrounding African elections?
-Investors should focus on policy predictability, regulatory environments, and the potential for economic stability post-elections to navigate the uncertainty surrounding African elections.
Outlines
🌐 Political and Economic Risk in Africa
The guest, Ronan, discusses his role in analyzing the intersection of politics and economics in Africa, with a focus on translating complex information into actionable insights for business decision-makers. He emphasizes the uncertainty and anxiety surrounding elections in Africa, which can affect local and intra-African businesses. Concerns such as fiscal slippage, currency impact, corruption, and violence are common. Ronan mentions the unpredictability of African elections, citing examples from Kenya, DRC, Angola, and Botswana. He stresses the importance of certainty for investors who prefer stable and predictable environments for business operations. The conversation also touches on the challenges faced by Nigeria and South Africa, two of the continent's largest economies, including regulatory policy predictability, business-friendliness, currency and liquidity issues, and security concerns.
📱 The Dual Role of Digital Democracy
The second paragraph explores the role of digital democracy, initially seen as a force for good by bringing the electorate closer to politicians and fostering accountability. However, it has been subverted to exploit divisions and create polarization through social media, fake news, and propaganda. This has led to a societal fracture, with a binary tension between the positive aspects of digital democracy and its misuse as a tool for societal division. The discussion raises questions about the future of digital democracy as internet access becomes more widespread, especially in light of recent internet shutdowns in Africa. The conversation ponders how this tension will be resolved and how young populations will react to such measures.
Mindmap
Keywords
💡Risk
💡Politics
💡Elections
💡Uncertainty
💡Regulatory Environment
💡Currency
💡Liquidity
💡Security
💡Digital Democracy
💡Internet Shutdowns
💡Investor Climate
Highlights
Ronan is the director of Signal Risk, focusing on the intersection of politics and economics in Africa.
His work translates complex political and economic information into actionable insights for commercial decision-makers.
About 20 African countries are going into elections this year, creating uncertainty and anxiety for investors.
Election outcomes in Africa can affect fiscal policies, currency values, corruption levels, and potential violence.
Internet shutdowns have become a common response to elections, affecting business operations.
Election results in Kenya and the DRC have shown that surprises are becoming the norm.
Smooth transitions of power have not been straightforward in Angola and Botswana.
Investors seek certainty and stability for predictable business environments.
Nigeria and South Africa, two of the largest economies in Africa, have been performing at subpar levels.
Regulatory policy predictability is a concern for investors in Nigeria.
Currency and liquidity issues, as well as security concerns, are key areas to watch in Nigeria.
South Africa's new president is facing challenges in consolidating power and pushing a reform agenda.
The upcoming South African elections will be crucial in determining the direction of the country.
Digital democracy was initially seen as a force for good, bringing accountability and closer governance.
Social media, fake news, and propaganda are now being used to exploit divisions and create polarization.
The tension between digital democracy and digital dictatorship is increasing as access to the internet becomes more prevalent.
In January, five African countries shut down the Internet, raising questions about the future of internet freedom and democracy.
Transcripts
[Applause]
[Music]
I'm joined in the studio today by one of
our fellows for the scent of African
management of markets runner got with us
and he's also the director of signal
risk
you're welcome Ronan thanks for having
me you deal in a very important area
that has to do with risk and politics
and economics on the continent do you
mind telling us more about what you do I
focus on the intersection of politics
and economics and translating that into
what it means for commercial
decision-makers so looking at the so
what because you know everybody's got
Google everybody's got information at
their fingertips but translating this
into a meaningful you know piece of
information with which you can make
decisions is is often the difficult
piece so we take really complex
information and we try and simplify it
in such a way that it's digestible easy
to understand and it helps to react to
events and also to anticipate things
that's pretty interesting because if you
think about the election event on the
continent we've got about 20 African
countries going into elections this year
from your expertise and based on what
you know what is the implication of that
on local businesses and even more
importantly on intra African businesses
when you think about elections in Africa
you know generally there's a lot of
anxiety and uncertainty around what
they're going to bring you know is there
gonna be fiscal slippage is there going
to be an impact on the currency is there
going to be corruption is there going to
be violence you know those generally
were the questions that people and
investors would have in the run-up to
elections now you've got a whole
different set of dynamics are they gonna
be Internet shutdowns is one very clear
case in points and as the past couple of
years have shown us that surprises are
starting to become the norm so in Kenya
the election result was annulled in in
the DRC an election was manipulated in
favor of an opposition candidate which
is something completely new in an
African context smooth transitions of
power and straightforward transitions of
power in Angola and Botswana haven't
been all that straightforward so you
know what I'm learning is that there's
no such thing as a straightforward
African election anymore and the the big
the big
issue when you're looking at elections
in Africa is around is around certainty
investors kind of don't want a lot of
disruption they don't want protracted
and elongated affair they want the thing
to be done in dusted so that it can get
on with with investing and doing
business in a stable and predictable
environment if we talk about the two
largest economies on the continent so
they're one of the they're part of the
countries who are going into election to
the CSO a talk in South Africa and
Nigeria which has just recently
completed theirs if I was thinking of
investing in any of these countries from
Africa what do what would you won't be
the one thing you think I should be
cautious about or what would be the one
thing I should focus on if you're gonna
be a pan-african player you can't ignore
Nigeria and South Africa two very very
important economies but they've been
performing at subpar levels for the
better part of the last five years
Nigeria you know the the big question
marks are on the regulatory policy
around policy predictability around how
business-friendly the current
administration is all investors really
want is is for a stable and predictable
regulatory environment and that hasn't
been the case if you look at kind of
incidents with MTN a few of the oil
companies a few of the telcos and other
international businesses so you know
that's kind of the first first factor
and then in the Nigerian context the the
currency and liquidity issues as well as
the security issues have have been a a
key area to watch in South Africa you
know we've had a new president
that'sthat's come through last year you
know he's been in power for four-round
about a year but the honeymoon is well
and truly over and now we go to the
polls to see what kind of mandate he's
gonna get again you know there's there's
a lot of talk about a reform agenda but
the president at the moment is it hasn't
really consolidated both internally
within his party and now it needs to get
a mandate from the electorate so I think
this is kind of pretty crucial in
determining the direction of in which
South Africa is going to go and how a
search of the president can be in in
this reform agenda so you know in both
countries I think the the the message is
quite clear
that you know you've been performing at
sub-optimal economic levels policy
predictability uncertainty and more
investor friendly climate is what
investors want to see do you think
there's a role for digital democracy if
we talk about South Africa first of all
is there any role that did totemo
because he can play yeah so let's let's
rewind a little bit you know when when
Egypt and Tunisia the revolutions
happened over you know Digital democracy
Facebook social media was seen to be a
force of good it was seemed to bring the
electorate's closer to alienated
politicians or people who kind of were
very distant from them you know this
this culture of accountability it it was
it was meant to kind of to improve
governance but now what we found is that
in fact social media and and fake news
and and propaganda is is being used to
kind of exploit divisions and to create
greater polarization and what's
happening then is that we're seeing
society is becoming more fractured so
you've got a very kind of almost binary
tension between this digital democracy
and a force of good and digital
dictatorship which is which is being
used to pull societies apart and how
this tension is going to be reconciled
you know as mirabile proliferation and
access to social media and the internet
becomes becomes more prevalent it's
going to be interesting you know in
January alone we had five countries shut
down the Internet's in Africa is this a
start of a trend is it going to be
circumvented how populations especially
young populations going to react to this
these are all questions that that we're
going to need to to to answer over the
coming days months and years thank you
very much this has been very handy
insights and it's nice it's nice to have
you share them with us
[Music]
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