| Welcome to Next Africa, a twice-weekly newsletter on where the continent stands now — and where it’s headed. Sign up here to have it delivered to your email. African nations feeling the pinch intend cutting back on spending, with very real repercussions for citizens. With their economies taking strain and their ability to raise more revenue highly constrained, Kenya, South Africa, Mozambique and Botswana all announced plans to pare back on planned expenditure over the past week. Ghana did so in March and others are likely to follow suit.  Protesters voice their opposition to tax increases in Nairobi, Kenya’s capital, in July 2024. Photographer: Patrick Meinhardt/AFP/Getty Images Violent protests erupted in Kenya last year after new levies were introduced, forcing President William Ruto’s administration to backtrack, while opposition from within South Africa’s ruling coalition derailed the National Treasury’s plans to raise value-added tax. In Mozambique, post-election unrest and a slump in the price of coal, the nation’s biggest export, have led to job losses and a financing crunch. And in Botswana, a collapse in demand for diamonds, the mainstay of the economy, has drained its savings and widened the budget deficit. The budget cutbacks may be fiscally prudent, but will likely adversely impact investment in health, education and infrastructure that will ultimately be needed to fire up economic growth. Adding to Africa’s woes are US President Donald Trump’s decision to abruptly end billions of dollars of aid to the developing world and his shakeup of global trade — which looks set to slow demand for key commodities and strip many nations of their preferential access to the world’s biggest market.  WATCH: Bloomberg’s chief Africa correspondent Jennifer Zabasajja discuss Kenya’s budget cuts with anchor Joumanna Bercetche. The International Monetary Fund said it expects sub-Saharan Africa’s gross domestic product to expand 3.8% this year, the least since the coronavirus pandemic struck in 2020. The region’s post-pandemic recovery has been overtaken by recent events, and it faces “yet another shock in the form of an abrupt shift in the external economic landscape,’’ the lender said. It warned that these developments will particularly affect countries “facing a funding squeeze and higher borrowing costs that in many cases is constraining their ability to finance essential services and development needs.’’ The outlook looks bleak indeed. — Monique Vanek Key stories and opinion:
Kenya Plans to Trim Next Budget as It Seeks New IMF Program
Botswana Eyes Spending Cuts as Diamond Slump Hits Economy
Mozambique Agrees $8 Billion Budget That Curbs Spending
South Africa’s Budget Failures Put Treasury Credibility at Risk
Angola Mulls IMF Financing as Bond Yields Soar on Oil Slump South African President Cyril Ramaphosa will set up a commission of inquiry into alleged political interference in the prosecution of crimes committed during the apartheid era, but stopped short of implementing remedies sought by affected families. The move is a response to a lawsuit filed by people impacted by the murder, torture and abductions meted out by the security forces. But more than 20 applicants in the case have been angered by the insistence of the president’s legal team that the new panel deal with a $9 million damages claim and that their restitution demands not be heard in court.  The Truth and Reconciliation Commission hears testimony into apartheid-era crimes at its first sitting in East London in 1996. Photographer: Philip Littleton/AFP/Getty Images Forthcoming reforms in Nigeria could see as much as a third of the working population being exempted from paying personal income tax. A third of workers earn 100,000 naira ($62) or less per month, and proposed amendments would see them excluded from the tax net, according to Taiwo Oyedele, who heads a presidential panel that’s spent almost two years reviewing the nation’s tax laws. The revenue take as a share of gross domestic product in Africa’s largest oil producer is among the lowest in the world at about 11%. Shortly after welcoming new members to its ranks, the BRICS bloc of nations is suffering from the same problem dogging other global multilateral institutions: Its members can’t agree on key issues. Foreign ministers from major emerging economies refused to sign a consensus statement after meeting in Rio de Janeiro due to a disagreement over a previously approved plan to reform the United Nations Security Council. Egypt and Ethiopia — two newer additions to the bloc named after original founders Brazil, Russia, India, China and later South Africa — balked at the group backing South Africa for a permanent seat on the body.  The leaders of BRICS nations at a summit in Kazan, Russia, in October 2024. Photographer: Maxim Shipenkov/AFP/Getty Images A forum organized by Mali’s military government suggested that Assimi Goita, who’s served as the West African nation’s interim leader since a 2021 coup, retain power for another five years. The adoption of the proposal would mark a further retreat from democracy in the Sahel region, where the military has also toppled the governments of Niger and Burkina Faso and postponed elections indefinitely. The forum also recommended the dissolution of all political parties in Mali. The United Arab Emirates said it thwarted an attempt to transfer weapons to Sudan’s army, the latest escalation in tensions between the Gulf power and military authorities in the North African nation torn apart by two years of civil war. Emirati officials seized ammunition and military equipment worth millions of dollars and arrested people during an inspection of a private aircraft at one of the UAE’s airports, the state-run WAM news agency citied Attorney-General Hamad Saif Al Shamsi as saying. It alleged the order was made at the request of the Sudanese army, with military chief Abdel Fattah Al-Burhan’s approval.  Abdel Fattah al-Burhan waves to supporters in Meroe, Sudan. Photographer: AFP/Getty Images A former Goldman Sachs banker’s lawyer told a federal judge he has asked US authorities to drop its foreign bribery case against his client, citing an executive order from Trump. Asante Berko’s lawyer, Robert Boone, said he sent the government a letter formally requesting a dismissal. Berko was indicted in 2020 and accused of conspiring with at least two Ghanaian officials in a bribery scheme on behalf of an unidentified Goldman client. The request comes after Trump issued an executive order rolling back enforcement of the Foreign Corrupt Practices Act, which he has said puts American companies at a disadvantage to their competitors overseas.  In this week’s Next Africa podcast, Jennifer Zabasajja speaks with Bloomberg senior reporter Antony Sguazzin about a Russian outreach program that offers young African women work-study opportunities in the Alabuga Special Economic Zone, and how Interpol is investigating allegations that the scheme amounts to human trafficking. Next Africa Quiz — The government of which African nation signed a three-year partnership with Spanish football club Atletico Madrid to promote tourism? Send your answers to mcohen21@bloomberg.net. Data Watch - Kenya’s annual inflation rate climbed to an eight-month high in April as food prices surged.
- Zimbabwe expects its corn output to more than triple this year as it recovers from its worst drought in four decades. Output of the grain for the season that ends May 31 is estimated at almost 2.3 million metric tons.
- South Africa’s trade surplus widened to 24.8 billion rand in March, more than economists expected. Sentiment among purchasing managers turned more gloomy last month though, due to uncertainty about global tariffs and domestic political strains.
Coming Up - May 6 Uganda, Mozambique, South Africa, Kenya, Zambia, Ghana PMIs for April, South Africa electricity production and consumption data for March, Kenya fourth-quarter GDP, Uganda money-supply data for March, Madagascar interest-rate decision
- May 7 Mauritius interest-rate decision, gross reserves for April, Malawi interest-rate decision, Ghana inflation data for April
- May 8 South Africa reserves, central bank government bond holdings for April, manufacturing production data for March, Mauritius inflation data for April, Uganda interest-rate decision
- May 10 Rwanda inflation data for April
| 
