<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/444PLG6PDNKKFA6UKQOPJROONE-820x547.jpg" alt="" class="wp-image-492714" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/444PLG6PDNKKFA6UKQOPJROONE-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/444PLG6PDNKKFA6UKQOPJROONE-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/444PLG6PDNKKFA6UKQOPJROONE-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/444PLG6PDNKKFA6UKQOPJROONE-768x513.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/444PLG6PDNKKFA6UKQOPJROONE-1536x1025.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/444PLG6PDNKKFA6UKQOPJROONE-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">The result board at the National Results Operation Centre of the Electoral Commission of South Africa (IEC), which serves as an operational hub where results of the national election are displayed, in Midrand, South Africa, May 30, 2024. REUTERS/Alet Pretorius</figcaption></figure>



MIDRAND, South Africa, May 31 (Reuters) &#8211; South African parties geared up for coalition talks on Friday as the governing African National Congress (ANC) looked set to fall well short of a majority for the first time in 30 years of democracy.



While the party of the late Nelson Mandela looked likely to remain the largest political force, voters appeared to have punished the former liberation movement for years of decline.



With results in from 57.3% of polling stations, the ANC had 41.9% of votes, a precipitous drop from the 57.5% it secured in the last national election in 2019.



The pro-business Democratic Alliance (DA) was in second place on 23.4%. uMkhonto we Sizwe (MK), a new party led by former president Jacob Zuma, was at 11.3% and eating into ANC support, particularly in KwaZulu-Natal, Zuma&#8217;s home province.



MK had overtaken the Marxist Economic Freedom Fighters (EFF), currently the third biggest party in parliament, which was sitting on 9.5%.



&#8220;I think it&#8217;s a very good day for South Africa. We said for the last 30 years the way to rescue South Africa was to break the ANC majority. We&#8217;ve done that,&#8221; DA leader John Steenhuisen told reporters at the results centre in Midrand, north of Johannesburg.



The ANC had won every previous national election since the historic 1994 vote that ended white minority rule, but over the last decade South Africans have watched the economy stagnate, unemployment and poverty climb and infrastructure crumble, leading to regular power outages.



Speculation was intense about which party or parties the ANC may approach to form a coalition and remain in government, or what other negotiations might be going on behind closed doors.



Asked if his party was in coalition talks, Steenhuisen said &#8220;no&#8221;.



&#8220;We&#8217;ve got to wait for the results to end before we can start with any major discussions but my first port of call is going to be with my Multi-Party Charter conference,&#8221; he said, referring to an alliance of opposition parties formed before the election.



The uncertainty impacted the government bond market, with prices of the country&#8217;s main internationally traded bonds down as much as 1.3 cents on the U.S. dollar. The falls were the third in a row and left the bonds at their lowest level in almost a month.&nbsp;US836205AR58=TEUS836205AZ74=TE



<h2 class="wp-block-heading" id="h-doomsday-coalition">&#8216;DOOMSDAY COALITION&#8217;</h2>



Projections by South Africa&#8217;s Council for Scientific and Industrial Research indicated the ANC would get 40.5% when full results are in.



The ruling party&#8217;s performance looked particularly dire in KwaZulu-Natal, where MK was on 44.1% to just 18.8% for the ANC, according to partial results as of 0830 GMT.



By law the election commission has seven days to release full provisional results, but election officials have said they are planning for a Sunday announcement.



The results page on the electoral commission&#8217;s website, which had been updating seamlessly since the start of the count, went blank for roughly two hours early on Friday due to a technical problem. The data reappeared shortly after 0700 GMT.



&#8220;The data in the data centre remains intact and the results have not been compromised &#8230; Result processing continues unaffected,&#8221; the commission said in a statement.



Political parties&#8217; share of the vote will determine the number of seats they get in the National Assembly, which then elects the next president.



That could still be the ANC&#8217;s leader, incumbent President Cyril Ramaphosa. However, an embarrassing showing at the polls risks fuelling a leadership challenge.



Investors and the business community have voiced concern over the prospect of the ANC entering a coalition with the EFF, which is calling for the seizure of white-owned farms and the nationalisation of mines and banks, or with Zuma&#8217;s MK which also talks about land confiscation.



Though the DA says it wants to oust the ruling party, Steenhuisen has not ruled out a partnership to block what he has called a &#8220;doomsday coalition&#8221; with the ANC bringing the EFF or MK into government.



(Additional reporting by Nqobile Dludla, Tannur Anders and Bate Felix; Writing by Alexander Winning and Estelle Shirbon; Editing by Stephen Coates and Emelia Sithole-Matarise)

National Results Operation Centre of the Electoral Commission of South Africa

South Africa heads for coalition as ANC set for big fall

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/5UHZBSDOAZMGXBEPEGYG4OCQHU-820x547.jpg" alt="" class="wp-image-492427" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/5UHZBSDOAZMGXBEPEGYG4OCQHU-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/5UHZBSDOAZMGXBEPEGYG4OCQHU-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/5UHZBSDOAZMGXBEPEGYG4OCQHU-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/5UHZBSDOAZMGXBEPEGYG4OCQHU-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/5UHZBSDOAZMGXBEPEGYG4OCQHU-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/5UHZBSDOAZMGXBEPEGYG4OCQHU-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Supporters of the African National Congress (ANC) wave party flags during their final rally ahead of the upcoming election at FNB stadium in Johannesburg, South Africa, May 25, 2024. REUTERS/Alaister Russell/File Photo</figcaption></figure>



MIDRAND, South Africa, May 30 (Reuters) &#8211; The African National Congress looked set on Thursday to lose the parliamentary majority it has held for 30 years, as partial election results suggested it would need a partner to stay in power &#8211; a first in South Africa&#8217;s post-apartheid history.



If the final results confirm the loss of its majority, the ANC will be forced to make a deal with one or more other parties to govern &#8211; a situation that could lead to political volatility in the coming weeks or months.



&#8220;The ANC might have to consider forming an alliance with one of its major rivals in order to maintain its hold on power,&#8221; said Andrew Bahlmann, a senior executive at M&amp;A advisory firm Deal Leaders International.



&#8220;The key area of uncertainty is the make-up of a future coalition.&#8221;



With results in from 20.4% of polling stations, the ANC&#8217;s share of the vote in Wednesday&#8217;s election stood at 43.4%, with the pro-business Democratic Alliance (DA) on 24.9%, data from the electoral commission showed on Thursday.



The Marxist Economic Freedom Fighters (EFF) party was on 8.8%, while uMkhonto we Sizwe (MK), a new party led by former president Jacob Zuma, was snapping at its heels on 8.1%, with support concentrated in Zuma&#8217;s home province of KwaZulu-Natal.



The ANC has won national elections held every five years since the landmark 1994&nbsp;vote, which marked the end of white minority rule and the ascent of Nelson Mandela as president.



But since those heady days the ANC&#8217;s support has declined because of discontent over high unemployment and poverty, rampant crime, frequent power blackouts and corruption.



While early results skew towards rural areas where the ANC is relatively strong, results from urban centres where it is weaker build up later.



Pollsters and two of the country&#8217;s three main broadcasters were predicting that the final results would confirm that the ANC &#8211; which won 57.5% of the vote in the previous election in 2019 &#8211; had&nbsp;lost its majority.



Under South Africa&#8217;s&nbsp;proportional voting system, parties&#8217; shares of the vote determine the number of seats they get in the National Assembly, which then elects&nbsp;the next president.



With the ANC still on course to be the largest party, that is likely to be its leader Cyril Ramaphosa, the incumbent.



However, a poor showing could make him vulnerable to a leadership challenge from within party ranks, whether in the immediate future or at some point during his term.



<h2 class="wp-block-heading" id="h-risk-of-gridlock">RISK OF GRIDLOCK</h2>



Which of the opposition parties the ANC may seek out as a potential coalition partner was the subject of intense speculation.



&#8220;(These results) give the ANC the option of partnering with the market-friendly DA, which markets would undoubtedly prefer, or one of the two populist parties that advocate for the nationalisation of mines and banks,&#8221; said Bahlmann, referring to the EFF and MK.



&#8220;The possibility of an unstable coalition is causing concern in financial markets, as such a coalition would likely demand policy changes that could discourage investment.&#8221;



The rand slipped more than 1% against the U.S. dollar while the wider equity index&nbsp;.JTOPI&nbsp;dropped more than 2%. The country&#8217;s international bonds also fell.



The ANC&nbsp;has&nbsp;some policy similarities&nbsp;with the EFF and MK, but both are led by former ANC figures who have fallen out with the ruling party&#8217;s leadership.



Talks with the DA&nbsp;could&nbsp;also&nbsp;prove&nbsp;challenging&nbsp;as the parties are far apart on policy and fiercely antagonistic.



Simon Harvey, head of foreign exchange analysis at Monex Europe, said the speed at which a coalition could be formed would be an indication of what was to come.



&#8220;If it is protracted, you may start to worry about a political gridlock going forward,&#8221; he said.



The ruling party issued a statement that gave little away.



&#8220;The ANC looks forward to a clear mandate from voters to continue the work of transforming South Africa,&#8221; it said.



Zuma&#8217;s MK, in contrast, adopted a triumphant tone, slamming what it called &#8220;Ramaphosa&#8217;s dismal regime&#8221; and setting out its own policy stall, which echoed some of the goals the ANC pursued during Zuma&#8217;s term as president.



&#8220;The MK party remains committed to honouring your trust and working tirelessly to ensure that the vision of free education, expropriation of land, job creation, poverty eradication, youth entrepreneurship and the ushering in of a new Constitution &#8230; becomes a reality for all South Africans,&#8221; it said.



Zuma was forced to quit as president in 2018 after a string of scandals and has since thrown his weight behind MK. The party, named after the ANC&#8217;s armed wing from the apartheid era, appeared to be costing both the ANC and the EFF votes.



By law, the electoral commission has seven days to declare full results, but in practice it is usually faster than that.



The new parliament must convene within 14 days of final results being declared and its first act must be to elect the nation&#8217;s president.



(Additional reporting by Kopano Gumbi, Tannur Anders, Alexander Winning, Nellie Peyton, Bate Felix, Sruthi Shankar and Karin Strohecker; Writing by Estelle ShirbonEditing by Gareth Jones, Toby Chopra and Emelia Sithole-Matarise)

President of the ANC Cyril Ramaphosa attends a rally ahead of the upcoming election at FNB stadium in Johannesburg

ANC on course to lose majority in South Africa’s seismic election

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/11/3K2CS37WYNNUVIVKGJN5PCM5CM-820x547.jpg" alt="" class="wp-image-430849" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/11/3K2CS37WYNNUVIVKGJN5PCM5CM-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/11/3K2CS37WYNNUVIVKGJN5PCM5CM-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/11/3K2CS37WYNNUVIVKGJN5PCM5CM-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/11/3K2CS37WYNNUVIVKGJN5PCM5CM-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/11/3K2CS37WYNNUVIVKGJN5PCM5CM-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/11/3K2CS37WYNNUVIVKGJN5PCM5CM-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Nigerian President Bola Tinubu arrives for the closing session of the New Global Financial Pact Summit, Friday, June 23, 2023 in Paris, France. Lewis Joly/Pool via REUTERS/File Photo</figcaption></figure>



LAGOS, May 30 (Reuters)&nbsp;&#8211;&nbsp;Nigerian Josephine Akiga looks around her empty restaurant in Abuja, where a sole customer sits eating, longing for the days when the place was filled with people.



Business has been so tough since President Bola Tinubu took office a year ago that she sometimes lets customers pay what they have for a meal just to keep business ticking along.



&#8220;When &#8230; you have not sold anything since morning, it&#8217;s better to have that money than to allow the person to go,&#8221; said Akiga. &#8220;So you just ask the person to sit and then give him food for the money he has.&#8221;



Since taking office in May last year, Tinubu has implemented reforms including slashing fuel and electricity subsidies and devaluing the naira currency twice NGN=D1 to try to increase investment and boost output. He says the policies are necessary to put Nigeria on a long-term growth path.



But the economy is growing well short of the 6% annual expansion targeted by Tinubu, while the reforms have driven inflation to a 28-year high, worsening a cost-of-living crisis.



Analysts&nbsp;say&nbsp;economic hardship&nbsp;is&nbsp;also fuelling crime which in turn is hurting people&#8217;s livelihoods.



Bismarck Rewane, a prominent economic analyst who was appointed to Tinubu&#8217;s economic council in March, agreed with the need for economic reforms but said more attention should have been paid to their implementation.



&#8220;The reforms came too quickly but there was no concrete plan to deal with the impact these reforms would have on the people,&#8221;&nbsp;he said.



The end of the fuel subsidy, which for decades made petrol very cheap for Nigerians, has hit people particularly hard. Petrol is widely used in the country to power not only cars but also generators for small businesses and homes.



Anthony Idowu, a 47-year-old bank employee, said the cost of filling his car had nearly quadrupled to 36,000 naira ($30) since the petrol subsidy was removed&nbsp;last year.



He now runs his petrol generator at home for only four hours a day to save money even if it means sleeping without a fan in the sweltering heat of Lagos, he said.



<h2 class="wp-block-heading" id="h-vicious-cycle">VICIOUS CYCLE</h2>



The government has also been criticised for not doing enough to sort out the country&#8217;s security problem, which&nbsp;some people&nbsp;say is affecting their livelihoods.&nbsp;The government insists the security situation is improving, saying it has eliminated thousands of armed gang members and Islamist fighters.



Abdulrasheed Isa Gora, a 32-year-old petty trader and farmer in the Birnin Magaji area of northwest Zamfara state, said attacks by armed gangs were on the rise, making it difficult to farm or travel to other communities to sell his wares.



Earlier this week, he and members of his community paid 50 million naira ($42,000) to free 18 family members and some residents who were kidnapped on March 10. Some 40 others remain missing, he said.



&#8220;We are living by God&#8217;s favour, not the government&#8217;s,&#8221; said Gora.



Nigeria has long struggled with insurgency and attacks by armed gangs who kidnap for ransom in the north, where poverty levels are higher.



But data from the Armed Conflict Location &amp; Event Data Project showed the number of kidnappings doubled to 7,086 in Tinubu&#8217;s first year in office.



Security analysts say economic hardship and the allure of ransom payments are driving mass abductions.



&#8220;That could well be the case,&#8221; said Information Minister Mohammed Idris, when contacted by Reuters.



&#8220;That is why the president is encouraging everyone not to pay ransom because when you pay ransom you are going to continue on this cycle of violence,&#8221; he said.



Back in the restaurant, it was economic uncertainty that was at the&nbsp;top&nbsp;of Akiga&#8217;s worries.



From daily sales of 100,000 naira ($84) a year ago, she was hardly making 20,000 naira ($17) now and that was quickly used up buying more stock.



&#8220;Any money you make you take it back to the market,&#8221; she said.



(Reporting by MacDonald Dzirutwe in Lagos and Abraham Achirga in Abuja, additional reporting by Ahmed Kingimi in Maiduguri; Editing by Ana Nicolaci da Costa)

FILE PHOTO: Summit for a new global financing pact takes place in Paris

Hardship, insecurity cloud Nigeria president’s first year in office

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="536" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-820x536.jpg" alt="" class="wp-image-479372" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-820x536.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-300x196.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-138x90.jpg 138w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-768x502.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-1536x1003.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: A view shows the logo of South Africa&#8217;s central reserve bank, at the reserve bank offices in Pretoria, South Africa, January 26, 2023. REUTERS/Siphiwe Sibeko</figcaption></figure>



PRETORIA, May 30 (Reuters)&nbsp;&#8211;&nbsp;South Africa&#8217;s central bank kept its main interest rate unchanged at 8.25%&nbsp;on Thursday,&nbsp;saying that high inflation expectations required &#8220;that we deliver on our target sooner rather than later&#8221;.



The decision was unanimous and came a day after the country held a pivotal general election. Early results show the ruling African National Congress was on course to lose a majority it has held for 30 years.



All 20 economists in a May 20-23 Reuters poll predicted there would be no change in the repo rate ZAREPO=ECI.



The South African Reserve Bank has kept monetary policy tight to try to steer inflation back towards the midpoint of its 3%-6% inflation target range.



Consumer inflation stood at 5.2% year on year&nbsp;ZACPIY=ECI&nbsp;in April, the latest month for which data is available, down slightly from 5.3% in March.



(Reporting by Kopano Gumbi and Alexander Winning; Additional reporting by Tannur Anders; Editing by Bate Felix)

South Africa trims rate hikes as power cuts slash growth prospects

South African central bank leaves key rate on hold as expected

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/HKHJ5EZWR5O3TEDZQXQKIQJWWE-820x547.jpg" alt="" class="wp-image-492340" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/HKHJ5EZWR5O3TEDZQXQKIQJWWE-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/HKHJ5EZWR5O3TEDZQXQKIQJWWE-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/HKHJ5EZWR5O3TEDZQXQKIQJWWE-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/HKHJ5EZWR5O3TEDZQXQKIQJWWE-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/HKHJ5EZWR5O3TEDZQXQKIQJWWE-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/HKHJ5EZWR5O3TEDZQXQKIQJWWE-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Julius Malema, the leader of South African opposition party, the Economic Freedom Fighters (EFF), waves to supporters at a rally in Dobsonville, Soweto near Johannesburg, South Africa, March 2, 2024. REUTERS/James Oatway/File Photo</figcaption></figure>



JOHANNESBURG, May 30 (Reuters) &#8211; South Africa&#8217;s Julius Malema, who quit the ruling African National Congress to form a radical leftist party, could potentially become a kingmaker or even deputy president if the ANC loses its majority as early election results suggest.



The prospect of the ANC co-opting Malema and his Economic Freedom Fighters (EFF) to stay in power after Wednesday&#8217;s election strikes fear into investors and the white upper-middle class he rails against.



The EFF&#8217;s promises to nationalise the country&#8217;s gold and platinum mines and seize land from white farmers are among proposals they fear threaten not just their privileges but also Africa&#8217;s most industrialised economy.



Malema&#8217;s pledge to redress persistent racial and economic disparities resonates with his constituents which include tens of thousands of unemployed, disenfranchised urban Black youths and middle class students struggling to afford fees or graduates unable to find decent jobs in a stagnant economy.



The ANC liberated Black South Africans from white minority rule, but the widespread prosperity it promised three decades ago has yet to materialise. Meanwhile the very richest &#8211; both Black and white &#8211; have seen their share of the wealth expand.



A third of South Africans, including many Black voters with college degrees, are out of work.



&#8220;The EFF points out accurately &#8230; that we haven&#8217;t solved the racial issue in this country,&#8221; Steven Friedman, director of South Africa&#8217;s Centre for the Study of Democracy, said.



Yet, he added that Malema had failed to broaden the party&#8217;s appeal to those in extreme poverty in rural areas.



The EFF, reminiscent of socialist movements of the past with its trademark red shirts and berets, captured more than 10% of the vote in national polls in 2019 and 2021 local ones.



However, Malema&#8217;s wealth and lifestyle have attracted criticism from political rivals who deride his penchant for flashy cars, gold watches, champagne and luxury mansions in leafy suburbs. He sold one such mansion, complete with a cinema and a cigar lounge to pay off $1 million in tax arrears.



He has also faced allegations of corruption, which he denies. In 2015, a court threw out money laundering charges against him relating to government contracts.



<h2 class="wp-block-heading" id="h-sowing-division">&#8216;SOWING DIVISION&#8217;</h2>



At a late 2020 rally in Senekal, in the largely agrarian Free State province, dozens of Malema&#8217;s Black supporters in red shirts were facing off with a small group of white supremacists, some donning apartheid-era army uniforms.



The tension was palpable until an EFF security guard called over one of the white counter-protestors with a friendly gesture. After talking, each then faced their side and made calming hand signals, defusing the row.



It was typical of Malema&#8217;s ability to turn up the heat on the country&#8217;s simmering racial and class tensions without them boiling over.



Born the son of a domestic worker for an Indian family in Limpopo, north of Johannesburg, Malema was politically active from a young age and rose through the ranks to ANC Youth League president in 2008.



He founded his breakaway party after the ruling ANC suspended him as youth leader in 2011 for &#8220;sowing division&#8221;.



While his followers affectionately call him &#8220;Juju&#8221; &#8211; short for Julius &#8211; Malema&#8217;s detractors prefer names like &#8220;firebrand&#8221;, &#8220;militant&#8221; &#8220;clown&#8221; or &#8220;populist&#8221;.



Yet in a nation in which the main populist issue is hostility towards migrants from other African countries, his party is the only one that seeks to repeal policies that hinder the free movement of Africans.



&#8220;The EFF is swimming against the tide when it comes to immigration,&#8221; Chris Ogunmodede, analyst and editor of World Politics Review, said. &#8220;(It) will likely lose out (on) many votes it might otherwise get.&#8221;



Although Malema briefly flirted with xenophobia in January 2022, when he announced visits to restaurants to check they were not employing too many foreigners, he never repeated the stunt.



(Additional reporting by Anait Miridzhanian; Editing by Estelle Shirbon and Emelia Sithole-Matarise)

FILE PHOTO: South African opposition party rally

South Africa’s divisive Malema could be post-election kingmaker

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107406138-1714028301272-gettyimages-1247341097-AFP_339P4DN-820x461.jpeg" alt="" class="wp-image-491921" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107406138-1714028301272-gettyimages-1247341097-AFP_339P4DN-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107406138-1714028301272-gettyimages-1247341097-AFP_339P4DN-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107406138-1714028301272-gettyimages-1247341097-AFP_339P4DN-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107406138-1714028301272-gettyimages-1247341097-AFP_339P4DN-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107406138-1714028301272-gettyimages-1247341097-AFP_339P4DN-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107406138-1714028301272-gettyimages-1247341097-AFP_339P4DN.jpeg 1600w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">The company logo adorns the side of the BHP gobal headquarters in Melbourne on February 21, 2023. &#8211; The Australian multinational, a leading producer of metallurgical coal, iron ore, nickel, copper and potash, said net profit slumped 32 percent year-on-year to 6.46 billion US dollars in the six months to December 31. (Photo by William WEST / AFP) (Photo by WILLIAM WEST/AFP via Getty Images)
William West | Afp | Getty Images</figcaption></figure>



May 29 (Reuters)&nbsp;&#8211;&nbsp;BHP Group&nbsp;BHP.AX&nbsp;said on Wednesday it did not intend to make a formal offer for Anglo American&nbsp;AAL.L, walking away from its $49 billion takeover deal, after the London-listed rival refused to extend the bid deadline.



&#8220;We were unable to reach agreement with Anglo American on our specific views in respect of South African regulatory risk and cost,&#8221; BHP said in a statement, adding that it did not get &#8220;key information&#8221; from Anglo to address these risks.



Anglo <a href="https://www.reutersconnect.com/all?search=all%3AL4N3HW1DF&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">rejected</a> BHP&#8217;s last-ditch request for more time to discuss a takeover offer, dismissing it as highly complex, after the miner had granted BHP a one-week extension to its original May 22 deadline to submit a binding offer.



This is a developing story&#8230;



(Reporting by Yadarisa Shabong and Pushkala Aripaka in Bengaluru; Editing by Shinjini Ganguli)

107406138-1714028301272-gettyimages-1247341097-AFP_339P4DN

BHP walks away from $49 billion takeover offer for Anglo American

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="533" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/KWU57PCES5KMPLXRN6DA4Y32LI-820x533.jpg" alt="" class="wp-image-490133" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/KWU57PCES5KMPLXRN6DA4Y32LI-820x533.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/KWU57PCES5KMPLXRN6DA4Y32LI-300x195.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/KWU57PCES5KMPLXRN6DA4Y32LI-139x90.jpg 139w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/KWU57PCES5KMPLXRN6DA4Y32LI-768x499.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/KWU57PCES5KMPLXRN6DA4Y32LI-1536x998.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/KWU57PCES5KMPLXRN6DA4Y32LI-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A man walks past election posters of the ruling African National Congress (ANC), as South Africa prepares for the May 29 general elections, in Soweto, South Africa, May 24, 2024. REUTERS/Siphiwe Sibeko</figcaption></figure>



KWAMASHU, South Africa, May 29 (Reuters) &#8211; South Africans voted on Wednesday in the most competitive election since the end of apartheid, with opinion polls suggesting the African National Congress could lose its parliamentary majority after 30 years in government.



Queues formed in the main cities of Johannesburg, Cape Town and Durban as polling got underway around 7 a.m. (0500 GMT), with lines also seen in the morning cold in townships on the outskirts of cities and in rural areas.



&#8220;I grew up loving the ANC because of how they fought for the freedom we have today,&#8221; said business owner Skhumbuzo Mnyandu, 48, who came out to vote in KwaMashu, a township close to Durban. &#8220;That is why I voted for them all these years.&#8221;



&#8220;But this year, I have changed because of the problems with the ruling party, and so I have become a member of the MK party,&#8221; he said, referring to uMkhonto we Sizwe, a new party backed by former president Jacob Zuma.



Voters at polling stations across the country cited high rates of unemployment and crime, frequent power blackouts and corruption in ANC ranks as reasons why they would vote for opposition parties, but others were wary of change.



Pensioner Charles Louw, 62, said he would remain loyal to the ANC as he distrusted the promises made by opposition parties to create jobs, end power cuts or crack down on crime.



&#8220;The ANC have been trying to do it, they are there, they have got experience, they know how to accommodate everything. But the new parties, where will they start?&#8221; he said after voting in Alexandra, a sprawling township east of Johannesburg.



Then led by Nelson Mandela, the ANC swept to power in South Africa&#8217;s first multi-racial election in 1994 and has won a majority in national elections held every five years since then, though its share of the vote has gradually declined.



If it falls short of 50% this time, the ANC will have to make a deal with one or more smaller parties to govern &#8211; uncharted and potentially choppy waters for a young democracy that has so far been dominated by a single party.



Voters are electing provincial assemblies in each of the country&#8217;s nine provinces, and a new national parliament which will then choose the next president.



With the ANC still on course to win the largest share of the vote, its leader President Cyril Ramaphosa is likely to remain in office.



More than 27 million South Africans are registered to vote at more than 23,000 polling stations where voting will continue until 9 p.m. (1900 GMT).



&#8220;If early indications are anything to go by, we may match or just surpass the 66% voter turnout (seen in the last election in 2019),&#8221; said Masego Sheburi, a senior official at the electoral commission, at a briefing about six hours into the election.



Turnout has steadily fallen since the start of the democratic era and is one of the key variables this time.



The election appeared to be going smoothly in most places, with Sheburi saying 93% of polling stations had opened on time.



Reuters reporters witnessed isolated incidents, such as voters being turned away from a Johannesburg polling station because they were not registered to vote there, and in one Alexandra location voting was delayed for hours due to the late arrival of ballot papers.



<h2 class="wp-block-heading" id="h-most-consequential-election">&#8216;MOST CONSEQUENTIAL ELECTION&#8217;</h2>



After voting at a polling station in Soweto, a huge township outside Johannesburg, Ramaphosa said the ANC had run a strong campaign.



&#8220;I have no doubt whatsoever in my heart of hearts that the people will invest their confidence in the African National Congress,&#8221; he said.



John Steenhuisen, leader of the pro-business Democratic Alliance (DA) party which won the second-largest share of the vote in the last election in 2019, urged voters to turn out in large numbers to bring change to South Africa.



&#8220;This is the most consequential election since 1994,&#8221; he said after casting his ballot in Durban.



Other opposition parties hoping to loosen the ANC&#8217;s grip on power include the Economic Freedom Fighters (EFF), founded by Julius Malema, a firebrand former leader of the ANC&#8217;s youth wing. The EFF wants to nationalise mines and banks and seize land from white farmers to address racial and economic disparities.



&#8220;We see ourselves overtaking the ANC, not the DA. The DA is small boys. We have no time for small boys,&#8221; a typically combative Malema told reporters as he arrived to cast his ballot in Seshego, in the northern province of Limpopo.



&#8220;We&#8217;re going for the real giant, which is the ANC. We are in an election to remove the ANC,&#8221; he said. &#8220;We are here to take over government.&#8221;



Opinion polls suggest EFF support has been hovering between 10 and 12%, far short of the ANC on 37-44%, but Malema could find himself in position to be a kingmaker depending on the election results.



Zuma&#8217;s new MK party looks set to eat into both ANC and EFF support, especially in his home province of KwaZulu-Natal where he has enduring influence despite being forced to quit as president in 2018 after a string of scandals.



The election commission is expected to start releasing partial results within hours of polling stations closing and final results within three or four days at most.



(Additional reporting by Wendell Roelf, Tannur Anders, Nqobile Dludla, Anait Miridzhanian, Bhargav Acharya, Joe Bavier, Tim Cocks, Olivia Kumwenda, Bate Felix and Sfundo ParakozovWriting by Estelle Shirbon and Alexander WinningEditing by Gareth Jones, Andrew Heavens and Emelia Sithole-Matarise)

South Africa prepares for the May 29 general elections, in Soweto

South Africans vote in most competitive election since end of apartheid

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="534" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/XBUX3KKTWRL4XAUGPJYRWVH7WQ-820x534.jpg" alt="" class="wp-image-491984" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/XBUX3KKTWRL4XAUGPJYRWVH7WQ-820x534.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/XBUX3KKTWRL4XAUGPJYRWVH7WQ-300x195.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/XBUX3KKTWRL4XAUGPJYRWVH7WQ-138x90.jpg 138w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/XBUX3KKTWRL4XAUGPJYRWVH7WQ-768x500.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/XBUX3KKTWRL4XAUGPJYRWVH7WQ-1536x1001.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/XBUX3KKTWRL4XAUGPJYRWVH7WQ-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



KIGALI, May 29 (Reuters)&nbsp;&#8211;&nbsp;Rwanda&#8217;s central bank cut its key interest rate&nbsp;RWREPO=ECI&nbsp;by 50 basis points to 7.0% on Wednesday, saying inflation was projected to remain within its target band at around 5% this year and next.



The rate cut followed two monetary policy meetings at which the Central Bank Rate was left unchanged.



In February, Governor John Rwangombwa said the bank could reduce the rate at upcoming meetings if inflation dynamics remained positive.



Annual inflation&nbsp;RWCPIY=ECI&nbsp;peaked at 21.7% in November 2022. It fell to 4.5% in April, well within policymakers&#8217; 2%-8% target range.



Rwangombwa told a news conference on Wednesday that risks to the inflation outlook included global geopolitical tensions that could affect international commodity prices and adverse weather conditions in Africa.



He said the economy continued to expand in the first quarter, helped by a strong performance by the agriculture, services and industry sectors.



This month Finance Minister Uzziel Ndagijimana reiterated the government&#8217;s economic growth forecasts of 6.6% this year, 6.5% in 2025, 6.8% a year later and 7.2% in 2027. The economy expanded 8.2% in 2023.



(Reporting by Philbert Girinema; Writing by George Obulutsa; Editing by Alexander Winning and Emelia Sithole-Matarise)

XBUX3KKTWRL4XAUGPJYRWVH7WQ

Rwanda central bank cuts key rate as inflation seen within target

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="515" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/E3QSTNRI5NLCHAEJURPRJHWWEI-820x515.jpg" alt="" class="wp-image-489417" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/E3QSTNRI5NLCHAEJURPRJHWWEI-820x515.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/E3QSTNRI5NLCHAEJURPRJHWWEI-300x188.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/E3QSTNRI5NLCHAEJURPRJHWWEI-143x90.jpg 143w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/E3QSTNRI5NLCHAEJURPRJHWWEI-768x482.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/E3QSTNRI5NLCHAEJURPRJHWWEI-1536x964.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/E3QSTNRI5NLCHAEJURPRJHWWEI-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: FILE PHOTO: The Anglo American logo is seen in Rusternburg October 5, 2015. Picture taken October 5, 2015. REUTERS/Siphiwe Sibeko//File Photo</figcaption></figure>



LONDON/JOHANNESBURG/MELBOURNE, May 29 (Reuters)&nbsp;&#8211;&nbsp;Anglo American&nbsp;AAL.L&nbsp;on Wednesday rejected BHP Group&#8217;s&nbsp;BHP.AX&nbsp;last-ditch request for more time to discuss a $49 billion takeover offer, dismissing it as highly complex and likely ending a five-week pursuit by the bigger rival.



Anglo had granted BHP a one week extension until 1600 GMT on Wednesday to its original May 22 deadline to submit a binding offer, after rejecting a third takeover proposal that it dismissed as difficult to execute.



BHP still has until then to make a firm offer or walk away. It did not immediately respond to a request for comment, but has previously indicated it would not make a hostile bid.



BHP&#8217;s shares closed flat on Wednesday at A$45.08. Anglo&#8217;s were little changed at 0950 GMT.



London-listed Anglo agreed to hold talks with BHP to try to iron out concerns over the structure of the proposed deal, namely its condition that Anglo unbundle its South African platinum and iron ore units before the takeover.



In an earlier statement, BHP said it needed more time to engage with Anglo, while outlining commitments to minimise regulatory risk in South Africa.



Those commitments included job security for employees in South Africa. BHP also said it would shoulder the costs of increased South African employee ownership that is expected to be required in any demerger.



But Anglo signalled those commitments were not enough.



&#8220;BHP continues to restate its belief that the risks of its complex structure are not material, yet has repeatedly and consistently stated both publicly and during the engagements that it is unwilling to amend its proposed structure to assume these risks,&#8221; Anglo said in its statement.



Anglo was founded in Johannesburg in 1917 and employs more than 40,000 South Africans, so any withdrawal would be a further economic blow to the country whose miners have been cutting jobs and investment as platinum especially falls out of favour.



South Africans are voting in an election on Wednesday, with polls suggesting the African National Congress could lose its majority after 30 years in power, in part due to anger about high unemployment and a stagnant economy.



JP Morgan analysts have estimated a takeover of Anglo by BHP could lead to outflows of $4.3 billion from South Africa and weaken the rand.



&#8220;Today&#8217;s announcement says to me that BHP are doing all they can to placate any concerns Anglo&#8217;s board could have from a South Africa jobs, and regulatory point of view,&#8221; said analyst Hayden Bairstow of broker Argonaut in Perth about BHP&#8217;s request for more time.



However, a source close to Anglo&#8217;s thinking said its investors shared its reservations about BHP&#8217;s proposal.



&#8220;The majority of the Anglo shareholders fully understand the concerns that are being expressed and I don&#8217;t believe that they feel that the risks in the structure and the price are fully taken into consideration by BHP,&#8221; the source said.



BHP&#8217;s latest proposal values Anglo at 29.34 pounds per share or 38.6 billion pounds ($49 billion).



One person familiar with the situation said it was virtually impossible for BHP to put in an offer by Wednesday&#8217;s deadline and Anglo&#8217;s statement could effectively have killed the deal.



Buying Anglo would strengthen BHP&#8217;s position in copper and other metals central to the world&#8217;s clean energy shift. Anglo, meanwhile, has outlined its own plan to divest less profitable assets and focus on expanding copper output.



(Reporting by Clara Denina in London, Felix Njini in Johannesburg, Melanie Burton in Melbourne and Scott Murdoch in Sydney; Additional reporting by Amy-Jo Crowley, Sameer Manekar; Editing by Christopher Cushing and Mark Potter)

FILE PHOTO: BHP-Anglo American deal raises alarm in Japan’s steel industry

Anglo rejects BHP’s last-ditch attempt to continue takeover talks

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="512" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/IEOR3BGJSROL5KFMYTELQHZUDI-820x512.jpg" alt="" class="wp-image-491950" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/IEOR3BGJSROL5KFMYTELQHZUDI-820x512.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/IEOR3BGJSROL5KFMYTELQHZUDI-300x187.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/IEOR3BGJSROL5KFMYTELQHZUDI-144x90.jpg 144w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/IEOR3BGJSROL5KFMYTELQHZUDI-768x480.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/IEOR3BGJSROL5KFMYTELQHZUDI-1536x959.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/IEOR3BGJSROL5KFMYTELQHZUDI-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: African Development Bank President Akinwumi Adesina addresses delegates during the Africa Climate Summit (ACS) 2023 at the Kenyatta International Convention Centre (KICC) in Nairobi, Kenya, September 5, 2023. REUTERS/Monicah Mwangi/file photo</figcaption></figure>



NAIROBI, May 29 (Reuters)&nbsp;&#8211;&nbsp;Africa&#8217;s economic growth is&nbsp;set&nbsp;to accelerate to 3.7% this year and 4.3%&nbsp;next&nbsp;from 3.1% in 2023, African Development Bank (AfDB) President Akinwumi Adesina said on Wednesday, expressing hope that the bank can boost infrastructure investment with IMF help.



&#8220;African economies are experiencing great resilience despite the challenges posed by climate change, geopolitical tensions, global inflation, rising debt, among others,&#8221; Adesina told the annual meeting of the bank.



In the past nine years the bank has&nbsp;invested over $50 billion in infrastructure projects on the continent, he said.



Adesina said two weeks ago that the International Monetary Fund had approved multilateral banks such as the AfDB lending against the Fund&#8217;s Special Drawing Rights (SDRs) monetary reserves.



SDRs are interest-bearing international reserve assets granted to IMF member countries in proportion to their shareholding.



&#8220;If the approved limit of $20 billion of the SDRs is channelled to multilateral development banks like us, we&nbsp;[the AfDB]&nbsp;can leverage this to deliver at least $80 billion of new financial support,&#8221; Adesina said.



The&nbsp;bank is helping to raise $3.2 billion for the East Africa standard gauge railway linking Tanzania, Democratic Republic of Congo and Burundi, he&nbsp;added.



It is also providing $500 million towards the development of the Lobito Corridor to connect Zambia, Angola and the Democratic Republic of Congo.



(Reporting by George Obulutsa; Editing by Bate Felix and Kevin Liffey)

Kenya to host first Africa Climate Summit in Nairobi

AfDB aims to boost infrastructure funding as African growth accelerates

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107406138-1714028301272-gettyimages-1247341097-AFP_339P4DN-820x461.jpeg" alt="" class="wp-image-491921" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107406138-1714028301272-gettyimages-1247341097-AFP_339P4DN-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107406138-1714028301272-gettyimages-1247341097-AFP_339P4DN-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107406138-1714028301272-gettyimages-1247341097-AFP_339P4DN-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107406138-1714028301272-gettyimages-1247341097-AFP_339P4DN-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107406138-1714028301272-gettyimages-1247341097-AFP_339P4DN-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107406138-1714028301272-gettyimages-1247341097-AFP_339P4DN.jpeg 1600w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">The company logo adorns the side of the BHP gobal headquarters in Melbourne on February 21, 2023. &#8211; The Australian multinational, a leading producer of metallurgical coal, iron ore, nickel, copper and potash, said net profit slumped 32 percent year-on-year to 6.46 billion US dollars in the six months to December 31. (Photo by William WEST / AFP) (Photo by WILLIAM WEST/AFP via Getty Images) William West | Afp | Getty Images</figcaption></figure>



LONDON — BHP Group on Wednesday said it believes an extension to talks with takeover target Anglo American is necessary, as the deadline for discussions looms later in the session.



The Australian miner said in a statement that it had proposed a number of “socioeconomic measures” to address concerns over its bid, but added that more time was needed for discussions.



The offer values the company at £38.6 billion ($49.2 billion), according to previous Reuters calculations.



“BHP believes a further extension of the Deadline is required to allow for further engagement on its proposal,” it said in a statement.



The rival miners have until 5 p.m. London time Wednesday to reach an agreement following a week-long extension of last week’s deadline.



Anglo American told CNBC that it would respond to BHP’s request “in due course.”



BHP Group’s bumper takeover bid is part of an effort to create a copper mining juggernaut and capitalize on the base metal’s critical role in the green energy transition.



Anglo rejected BHP’s previous offers, saying they undervalued the company and its prospects.



The British miner has also raised concerns over demands for it to de-merge from two of its South African entities, which company Chairman Stuart Chambers previously said would create “substantial uncertainty” and executive risk for the company.



This is a breaking news story. Please check back from updates.

BHP Group wants extension to $49 billion Anglo American takeover talks as deadline looms

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107420527-1716895336733-gettyimages-2154606751-cm1_5311_5trvbvmd-820x462.jpeg" alt="" class="wp-image-491655" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107420527-1716895336733-gettyimages-2154606751-cm1_5311_5trvbvmd-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107420527-1716895336733-gettyimages-2154606751-cm1_5311_5trvbvmd-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107420527-1716895336733-gettyimages-2154606751-cm1_5311_5trvbvmd-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107420527-1716895336733-gettyimages-2154606751-cm1_5311_5trvbvmd-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107420527-1716895336733-gettyimages-2154606751-cm1_5311_5trvbvmd.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">President of the ruling African National Congress (ANC) and South African President, Cyril Ramaphosa at a rally on May 25, 2024 in Johannesburg, South Africa.  Chris Mcgrath | Getty Images News | Getty Images</figcaption></figure>



Some 30 years on from the peaceful transition from apartheid rule to democracy, South Africa could once again be on the cusp of change.



Since coming to power in South Africa’s first democratic election in 1994, the African National Congress has focused on making inclusivity a core pillar of the country’s economy.



But its efforts to raise the living standards of the disadvantaged haven’t always been successful, and in Wednesday’s election, the dominance of the party is expected to wane.



Current polling suggests that the ANC, led by President Cyril Ramaphosa, could see its share of the vote fall below 50% for the first time.



While the party of Nelson Mandela had 57.5% support in the last national election, it was already edging close to losing its stronghold in key areas like the economic hub of the country, Gauteng.



Of the 62-million-strong population, more than 27.6 million South Africans are registered to vote. And turnout may be a worry as voter apathy rises.



At the last national assembly election in 2019, turnout was 66%, already 7 percentage points lower than the previous vote. Even with the highest possible voter turnout, the ANC’s result is expected to drop below 50%.



<h2 class="wp-block-heading" id="h-blackouts-unemployment-corruption-and-crime"><a></a>Blackouts, unemployment, corruption and crime</h2>



The issues facing the country are many and remain systemic.



Africa’s most industrialized nation has a weak power grid which has led to hundreds of hours of blackouts hampering development and manufacturing.



It is also battling an unemployment rate of almost 33% — among the highest in the world — anemic economic growth that may not reach 1% this year, and corruption scandals that have pointed to weaknesses in governance by the ANC and its affiliates.



In addition to this, the country has one of the highest violent crime rates in the world, with 45 murders for every 100,000 people.  



Voters also have much more choice this time around, with many more candidates to choose from.



Some 14,889 candidates will stand in contention for 887 seats across at least 70 parties.



While the incumbent Ramaphosa stands again, his biggest rivals include John Steenhuisen from Democratic Alliance and Julius Malema from Economic Freedom Fighters.



All face a familiar foe who could serve as king-maker in this election. Former President Jacob Zuma is currently leader of uMkhonto weSizwe, a political party only created in December 2023.



Zuma, who was sentenced to 15 months in prison for failing to appear at an inquiry into corruption, has recently won a court battle allowing him to run for parliament.



<h2 class="wp-block-heading"><a></a>‘Significantly adverse market reaction’</h2>



If polls are to be believed, the election results will see South Africa end up with its first coalition government.



Analysts from Fitch Solutions expect the ANC to form a coalition with smaller parties, “allowing it to remain the main policy driver.”



However they flagged a number of unexpected — but possible — outcomes that could be negatively received by markets.



“We continue to flag three alternative scenarios: the ANC scraping a slim majority, an ANC-Economic Freedom Fighters (EFF) coalition, or a win by the opposition coalition, the Multi-Party Charter,” the Fitch Solutions analysts wrote earlier this month.



“While any of the coalition groupings will pose headwinds to policymaking, negatively impacting investor sentiment, we flag that an ANC-EFF coalition would likely result in a significantly adverse market reaction, negatively impacting bond yields and the rand.”

107420527-1716895336733-gettyimages-2154606751-cm1_5311_5trvbvmd

South Africa prepares for pivotal election that could see ANC lose its grip on power

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107420495-1716891456938-gettyimages-2151869385-ef_11330_laasronv-820x462.jpeg" alt="" class="wp-image-491637" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107420495-1716891456938-gettyimages-2151869385-ef_11330_laasronv-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107420495-1716891456938-gettyimages-2151869385-ef_11330_laasronv-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107420495-1716891456938-gettyimages-2151869385-ef_11330_laasronv-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107420495-1716891456938-gettyimages-2151869385-ef_11330_laasronv-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/107420495-1716891456938-gettyimages-2151869385-ef_11330_laasronv.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Labour’s Shadow Chancellor of the Exchequer Rachel Reeves gives a speech on the British economy ahead of the Bank of England monetary policy release on May 07, 2024 in London, England. Dan Kitwood | Getty Images News | Getty Images</figcaption></figure>



LONDON — More than 100 business leaders on Tuesday voiced their support for the U.K.’s center-left opposition Labour Party, nearly five weeks before the country heads to the polls.



The group, which includes Wikipedia founder Jimmy Wales and former vice-chairman of JP Morgan Cazenove Charles Harman, said in an open letter to The Times newspaper: “We, as leaders and investors in British business, believe it is time for a change.”



The writers of the letter claim that the U.K. economy has suffered from a decade of stagnation amid a lack of both political stability and a long-term, consistent economic strategy. The country has been “denied the skills and infrastructure it needs to flourish,” the letter says.



The Labour Party has “shown it has changed and wants to work with business to achieve the UK’s full economic potential,” they said.



Signatories also include WPP’s U.K. President Karen Blackett, JD Sports and British Retail Consortium Chair Andrew Higginson, and the former CEOs of Tesco Bank and Heathrow Airport. Few current FTSE 250 chief executives appear on the list.



The right-wing Conservative Party has been in power since 2010, initially as part of a coalition with the smaller, centrist Liberal Democrat Party. The U.K. has had five prime ministers during that period.



The last U.K. general election was held in 2019 and resulted in a decisive victory for the Conservatives under former U.K. Prime Minister Boris Johnson, who resigned in 2022 following a series of controversies.



Political polls for the last two years have pointed to a likely Labour victory, despite the major turnover in the national vote that will be required.



Incumbent Prime Minister Rishi Sunak last week called a surprise election for July 4. In his speech and in comments to media, Sunak said his government had overseen a fall in inflation and a return to economic growth.



The U.K. economy expanded by 0.6% in the first quarter, after falling into a shallow recession last year.



Labour has placed a major focus on committing to fiscal discipline in the party’s campaign messaging. In a release Tuesday, Labour said its pledges include establishing a new publicly owned energy company and bringing train operators under public ownership.



Labour’s shadow finance minister and former banker Rachel Reeves, has meanwhile made a long-running effort to woo business and finance executives.



In a speech on Tuesday, Reeves said the Labour Party would cap corporation tax at its current level, work with the private sector to drive U.K. investment and publish a business tax roadmap within six months of taking power, the BBC reported.



Delivering his own speech on the campaign trail, Sunak said that Labour would not bring financial security to people, according to the BBC.



CNBC has contacted the Conservative Party for comment.

107420495-1716891456938-gettyimages-2151869385-ef_11330_laasronv

More than 100 business leaders including Wikipedia’s Jimmy Wales sign open letter backing Britain’s center-left opposition

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="768" height="512" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/IFC-World-Bank-edited.jpg" alt="" class="wp-image-428524" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/IFC-World-Bank-edited.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/IFC-World-Bank-edited-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/IFC-World-Bank-edited-135x90.jpg 135w" sizes="auto, (max-width: 768px) 100vw, 768px" /><figcaption class="wp-element-caption">IFC World Bank Photo: via Flickr</figcaption></figure>



LONDON, May 28 (Reuters)&nbsp;&#8211;&nbsp;The World Bank&#8217;s private finance arm on Tuesday launched a programme to provide up to $4 billion to small businesses in emerging markets, with a focus on women-owned firms and those in the agriculture and climate sectors.



The International Finance Corporation said it would advance the funds to banks, non-bank financial institutions, microfinance institutions, and innovative digital lenders that loan to micro, small and medium-sized businesses.



The MSME Financing Platform would aim to attract a further $4 billion by using credit enhancements to attract private sector capital.



&#8220;Micro, small, and medium enterprises form the backbone of most developing economies, yet they face significant financial barriers that hinder their potential,&#8221; said IFC Managing Director Makhtar Diop in a statement.



MSMEs make up more than 90% of all firms and account, on average, for 60-70% of total employment and 50% of GDP worldwide, the IFC said, yet the SME Finance Forum puts the annual financing gap at around $5.7 trillion.



Access to finance has been hampered by tighter credit conditions, rising interest rates and a decline in risk appetite among mainstream lenders, the IFC said, something it hoped to reverse by offering to take the first loss on loans.



Up to $100 million of finance to help the platform de-risk the credit and foreign currency exposures will come from the International Development Association, it added. I



&#8220;Our new financing platform addresses these challenges head-on, empowering financial service providers to extend critical support to these businesses, particularly those that are women-led or environmentally focused.&#8221;



(Reporting by Simon Jessop; Editing by Sriraj Kalluvila)

IFC World Bank Photo: via Flickr

IFC launches $4 bln platform to support small firms in developing markets

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/GEHCKBE6DZLYNKSPJ6M6MCXGOE-820x547.jpg" alt="" class="wp-image-491568" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/GEHCKBE6DZLYNKSPJ6M6MCXGOE-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/GEHCKBE6DZLYNKSPJ6M6MCXGOE-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/GEHCKBE6DZLYNKSPJ6M6MCXGOE-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/GEHCKBE6DZLYNKSPJ6M6MCXGOE-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/GEHCKBE6DZLYNKSPJ6M6MCXGOE-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/GEHCKBE6DZLYNKSPJ6M6MCXGOE-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: President of the African National Congress (ANC) Cyril Ramaphosa delivers an address to supporters during the political party’s final rally ahead of the upcoming election at FNB stadium in Johannesburg, South Africa, May 25, 2024. REUTERS/Alaister Russell/File Photo</figcaption></figure>



JOHANNESBURG, May 28 (Reuters) &#8211; South African President Cyril Ramaphosa, who has staked his reputation on cleaning up the image of the ruling African National Congress, will lead the party toward its biggest test of the democratic era when South Africans vote on Wednesday.



Ramaphosa, who helped found the country&#8217;s biggest mining union and later became one of its wealthiest businessmen, took on the presidency in 2018 and survived a misconduct scandal to be re-elected to the ANC&#8217;s helm in 2022.



He has struggled to lift economic growth, make a dent in high unemployment with a third of South Africans jobless, or end crippling power cuts &#8211; all of which voters are expected to punish the ANC for at the ballot box on May 29.



If the party loses its majority for the first time in 30 years, as opinion polls predict, some political analysts say 71-year-old Ramaphosa will be unlikely to see out a second term.



Ramaphosa was the ANC&#8217;s lead negotiator during talks that led to a peaceful end to apartheid, which enabled Nelson Mandela to become South Africa&#8217;s first Black president after 1994&#8217;s historic all-race vote.



He also played an important role in the drafting of South Africa&#8217;s progressive constitution.



Despite his evident gifts, Ramaphosa gave up politics in 1996 and entered business, as Mandela&#8217;s newly elected ANC sought to dilute the dominance of the white minority in the boardrooms of the new South Africa.



Some say he was pushed by Mandela&#8217;s protege and eventual successor, former President Thabo Mbeki. Ramaphosa withdrew from politics under Mbeki and set up an investment vehicle called Shanduka &#8211; which means &#8220;change&#8221; in the language of his Venda people.



Shanduka grew into one of the biggest Black-owned investment vehicles in South Africa. Ramaphosa was one of the main beneficiaries of the ANC&#8217;s policy of Black Economic Empowerment, which was meant to reduce inequality but which critics say led to people with ANC connections acquiring assets at knock-down prices.



<h2 class="wp-block-heading" id="h-silver-tongued-negotiator">SILVER-TONGUED NEGOTIATOR</h2>



The son of a retired policeman, Ramaphosa was a thorn in the side of white mine bosses in the 1980s, leading the National Union of Mineworkers (NUM) that he co-founded in one of the largest strikes in the country&#8217;s history.



He left the NUM in 1991 and was elected secretary-general of the ANC, in charge of the day-to-day running of the party, a year after it was unbanned by the apartheid government.



Ramaphosa&#8217;s negotiating skills at constitutional talks in the early 1990s won him grudging respect from South Africa&#8217;s last white president, F.W. de Klerk, who said Ramaphosa&#8217;s &#8220;silver tongue and honeyed phrases lulled potential victims while his arguments relentlessly tightened around them&#8221;.



Ramaphosa started winding down his business interests in 2012, when he became the ANC&#8217;s No. 2 official under former President Jacob Zuma.



He replaced Zuma as ANC leader in 2017, vowing to rid the ruling party of graft and revitalise the economy.



But just as he was about to start campaigning for his second term as party chief, he faced calls to quit after an advisory panel found preliminary evidence that he may have violated the constitution over a large amount of cash found hidden in furniture at his game farm.



He has denied wrongdoing and was not charged with any crimes but his reputation took a hit from the incident dubbed &#8220;Farmgate&#8221;.



<h2 class="wp-block-heading" id="h-champion-of-global-south">CHAMPION OF GLOBAL SOUTH</h2>



Ramaphosa has been criticised for appearing to prevaricate on crucial reforms to avoid rifts within his party &#8211; a far cry from the decisiveness he showed as a union leader in the 1980s.



Policy changes on energy security, jobs and the green energy transition stumbled on internal party divisions, and several committees he created have only dragged out these disagreements.



But his supporters applaud his ability to preserve consensus and say he has made important achievements advancing South Africa&#8217;s reputation as a champion of the so-called &#8220;Global South&#8221;, shorthand for some low- and middle-income countries including India.



During the COVID-19 pandemic Ramaphosa was one of the most prominent voices globally calling for fairer distribution of vaccines.



More recently South Africa filed a genocide case against Israel at the International Court of Justice, leading judges to rule last week that Israel must halt its military assault on the Gaza city of Rafah. Israel has vehemently rejected the allegations.



Ramaphosa has campaigned on the ANC&#8217;s successes over the last 30 years, but critics say he has offered little in the way of new solutions to South Africa&#8217;s biggest challenges, including high crime and stark inequality.



At the ANC&#8217;s final campaign rally before the election, he promised to &#8220;do better&#8221; before a crowd of tens of thousands of supporters gathered at a Soweto soccer stadium. Many filed out before he had finished his speech.



(Editing by Emelia Sithole-Matarise)

FILE PHOTO: President of the ANC Cyril Ramaphosa attends a rally ahead of the upcoming election at FNB stadium in Johannesburg

South Africa’s Ramaphosa steers ANC into potentially pivotal election

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/11/AXIZJVFVSJPH5JV3TFFSZSORV4-820x547.jpg" alt="" class="wp-image-429146" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/11/AXIZJVFVSJPH5JV3TFFSZSORV4-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/11/AXIZJVFVSJPH5JV3TFFSZSORV4-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/11/AXIZJVFVSJPH5JV3TFFSZSORV4-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/11/AXIZJVFVSJPH5JV3TFFSZSORV4-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/11/AXIZJVFVSJPH5JV3TFFSZSORV4-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/11/AXIZJVFVSJPH5JV3TFFSZSORV4-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Zambia&#8217;s Finance Minister Situmbeko Musokotwane attends the Annual Meetings of the International Monetary Fund and World Bank in Washington, U.S., October 15, 2022. REUTERS/James Lawler Duggan/File Photo</figcaption></figure>



LONDON, May 28 (Reuters)&nbsp;&#8211;&nbsp;Zambia&#8217;s ministry of finance said on Tuesday that more than 90% of holders of its $3 billion in outstanding international bonds had accepted its restructuring proposal so far, paving the way for the country to emerge from a lengthy default.



Voting on the proposal only finishes officially on May 30.



However, on the basis of the instructions the government had received by May 24, &#8220;Zambia expects that the meetings will be quorate and that each of the extraordinary resolutions in respect of each series of existing notes will be approved at the relevant meeting,&#8221; the ministry said in a regulatory statement.



Zambia defaulted more than three years ago and is reworking its debt under the Common Framework, a G20 platform to bring together big creditors like China and the traditional group of developed creditor nations, known as the Paris Club, to ensure swift and smooth debt overhauls for low-income countries.



Zambia was widely seen as a test case. But the process has been beset by long delays, which have hamstrung much-needed investments, curtailed economic growth and weighed on local financial markets. A devastating drought had worsened the situation.



Under the proposed plan, bondholders will swap three existing instruments due to mature in 2022, 2024 and 2027, into two amortising bonds, one of which would have higher repayments if the country&#8217;s economic outlook improved.



Zambia secured a $1.3-billion loan from the International Monetary Fund in 2022, which required it to restructure its debt with other creditors.



Zambia&#8217;s international bonds traded unchanged, with the 2024 bond indicated at 63.4 cents in the dollar and the 2027 maturity at 75.9 cents, according to Tradeweb data.&nbsp;XS1056386714=TE,&nbsp;XS1267081575=TE



(Reporting by Karin Strohecker, editing by Amanda Cooper)

FILE PHOTO: Zambia’s Finance Minister Situmbeko Musokotwane attends the Annual Meetings of the International Monetary Fund and World Bank in Washington

Zambia set to emerge from default after bondholders back $3 bln debt rework

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/RBDRNX6KFFJ3LNZOTUTISZLDJE-820x547.jpg" alt="" class="wp-image-491521" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/05/RBDRNX6KFFJ3LNZOTUTISZLDJE-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/RBDRNX6KFFJ3LNZOTUTISZLDJE-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/RBDRNX6KFFJ3LNZOTUTISZLDJE-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/RBDRNX6KFFJ3LNZOTUTISZLDJE-768x513.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/RBDRNX6KFFJ3LNZOTUTISZLDJE-1536x1025.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/05/RBDRNX6KFFJ3LNZOTUTISZLDJE-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: President of China Xi Jinping and South African President Cyril Ramaphosa attend the China-Africa Leaders&#8217; Roundtable Dialogue on the last day of the BRICS Summit, in Johannesburg, South Africa, August 24, 2023. REUTERS/Alet Pretorius/Pool/File Photo</figcaption></figure>



JOHANNESBURG/NAIROBI, May 28 (Reuters)&nbsp;&#8211;&nbsp;China&#8217;s flagship economic cooperation program is bouncing back after a lull during the global pandemic, with Africa a primary focus, according to a Reuters analysis of lending, investment and trade data.



Chinese leaders have been citing the billions of dollars committed to new construction projects and record two-way trade as evidence of their commitment to assist with the continent&#8217;s modernisation and foster &#8220;win-win&#8221; cooperation.



But the data reveals a more complex relationship, one that is still largely extractive and has so far failed to live up to some of Beijing&#8217;s rhetoric about the Belt and Road Initiative, President Xi Jinping&#8217;s strategy to build an infrastructure network connecting China to the world.



While new Chinese investment in Africa increased 114% last year, according to the Griffith Asia Institute at Australia&#8217;s Griffith University, it was heavily focused on minerals essential to the global energy transition and China&#8217;s plans to revive its own flagging economy.



Those minerals and oil also dominated trade. As efforts falter to boost other imports from Africa, including agricultural products and manufactured goods, the continent&#8217;s trade deficit with China has ballooned.



Chinese sovereign lending, once the main source of financing for Africa&#8217;s infrastructure, is at its lowest level in two decades. And public-private partnerships (PPPs), which China has touted as its new preferred investment vehicle globally, have yet to gain traction in Africa.



The result is a more one-sided relationship than China says it wants, one that is dominated by imports of Africa&#8217;s raw materials and that some analysts argue contains echoes of colonial-era Europe&#8217;s economic relations with the continent.



&#8220;This is something late-19th century Britain would recognise,&#8221; said Eric Olander, co-founder of the China-Global South Project website and podcast.



China rejects such assertions.



&#8220;Africa has the right, capacity and wisdom to develop its external relations and choose its partners,&#8221; China&#8217;s foreign ministry wrote in response to Reuters&#8217; questions.



&#8220;China&#8217;s practical support for Africa&#8217;s path of modernisation in accordance with its own characteristics has been welcomed by an increasing number of African countries.&#8221;



<h2 class="wp-block-heading" id="h-a-pivot-with-potential">A PIVOT WITH POTENTIAL?</h2>



China&#8217;s engagement in Africa, a focus of the Belt and Road Initiative (BRI), grew rapidly in the two decades before the COVID-19 pandemic. Chinese companies built ports, hydropower plants and railways across the continent, financed mainly through sovereign loans. Annual lending commitments peaked at $28.4 billion in 2016, according to the Global China Initiative at Boston University.



But many projects proved unprofitable. As some governments struggled to repay loans, China cut lending. COVID-19 then pushed it to turn inward, and Chinese construction projects in Africa fell.



A rebound in sovereign lending is not expected.



Policymakers in Beijing have instead been pushing Chinese companies to take equity stakes and operate infrastructure they build for foreign governments. The aim,&nbsp;China analysts say, is to help companies win higher-value contracts and, by giving them skin in the game, ensure the projects are economically viable.



Lending to Special Purpose Vehicles (SPVs), perhaps the most common means of PPP infrastructure investment, has been growing as a proportion of China&#8217;s overseas loans, according to figures shared exclusively with Reuters by AidData, a research centre at U.S. university William &amp; Mary.



The $668-million Nairobi Expressway, a public-private partnership built and run by the state-owned China Road and Bridge Corporation (CRBC), could be proof of concept for the model in Africa. Since it opened in August 2022, the toll road has been allowing commuters to speed above the Kenyan capital&#8217;s notorious traffic snarls, beating revenue and usage targets.



Daily average use in March was already 57,000 vehicles, exceeding a 2049 target of around 55,000 set by CRBC in a 2019 presentation on the project&#8217;s economic viability seen by Reuters.



But few companies are following CRBC&#8217;s example in Africa. While globally some 45% of Chinese non-emergency lending was to SPVs from 2018 to 2021, the most recent year for which AidData figures are available,&nbsp;the figure was only 27% for Africa.



Analysts point to a number of likely reasons, including a lack of legal frameworks for PPPs in many African countries and the view among some Chinese companies &#8211; many of them relative newcomers to PPPs &#8211; that African markets are risky.



China&#8217;s foreign ministry did not directly address a request for comment on the lower SPV figures for Africa. But it said the government encourages Chinese companies to &#8220;actively develop new modes of cooperation&#8221; such as PPPs to bring more private investment to Africa.



<h2 class="wp-block-heading" id="h-growing-engagement">GROWING ENGAGEMENT</h2>



The Griffith Asia Institute put China&#8217;s total engagement in Africa &#8211; a combination of construction contracts and investment commitments &#8211; at $21.7 billion last year, making it the largest regional recipient.



Data from the American Enterprise Institute, a Washington-based think tank, showed investments hitting nearly $11 billion in 2023, the highest level since it began tracking Chinese economic activity in Africa in 2005.



Some $7.8 billion of that went to mining, like Botswana&#8217;s Khoemacau copper mine, which China&#8217;s MMG Ltd bought for $1.9 billion, and cobalt and lithium mines in countries including Namibia, Zambia and Zimbabwe.



The hunt for critical minerals is driving infrastructure construction as well. In January, for example, Chinese companies pledged up to $7 billion in infrastructure investment under a revision of their copper and cobalt joint venture agreement with Democratic Republic of Congo.



Western and Gulf powers are also racing to lead the world&#8217;s energy transition, with the United States and European governments backing the Lobito Corridor, a rail link to bring metals from Zambia and Congo to Africa&#8217;s Atlantic coast.



African leaders have struggled, however, to raise financing for some other priority projects.



Despite the success of the Nairobi Expressway, for example, work on several Kenyan roads stalled when the government ran out of money to pay the Chinese construction firms.



During a visit to Beijing last October, President William Ruto asked for a $1 billion loan to complete the projects.



A Chinese foreign ministry spokesman, Wang Wenbin, said discussions about the request were ongoing. Kenya&#8217;s finance ministry did not respond to a request for comment.



The final phase of a railway line intended to traverse Kenya from its main port to the border with Uganda has been in similar limbo since Chinese financing dried up in 2019. Uganda cancelled the contract for its portion of the line in 2022, after Chinese backers pulled out.



When asked about the decline in lending for African infrastructure, Chinese officials point to a pivot to trade and investment, arguing that BRI-generated trade boosts Africa&#8217;s wealth and development.



Two-way trade reached a record $282 billion last year, according to Chinese customs data. But at the same time, the value of Africa&#8217;s exports to China fell 7%, mainly due to a decline in oil prices, and its trade deficit widened 46%.



Chinese officials have sought to assuage the concerns of some African leaders.



At a summit in Johannesburg last August, Xi said Beijing would launch initiatives to support the continent&#8217;s manufacturing and agricultural modernisation &#8211; sectors African policymakers consider key to closing trade gaps, diversifying their economies and creating jobs.



China has also pledged to increase agricultural imports from Africa.



Such efforts, for now, are coming up short.



With one of Africa&#8217;s largest trade deficits to China, Kenya has been pushing to increase access to the world&#8217;s second-largest consumer market, recently gaining it for avocados and seafood. But cumbersome health and hygiene regulations mean Chinese consumers remain out of reach for many producers.



&#8220;The Chinese market is a new one,&#8221; said Ernest Muthomi, CEO of the Avocado Society of Kenya. &#8220;It was a challenge because you have to install the equipment for fumigation.&#8221;



Of 20 billion shillings ($150.94 million) worth of avocados exported last year, just 10% went to China.



Overall, Kenyan exports to China fell over 15% to $228 million, Chinese customs data showed, as a decline in titanium production led to a drop in shipments of the metal &#8211; a key export to China.



But Chinese manufactured goods kept coming.



That&#8217;s not sustainable, said Francis Mangeni, an advisor at the Secretariat of the African Continental Free Trade Area.



Unless African nations can add value to their exports through increased processing and manufacturing, he said, &#8220;we are just exporting raw minerals to fuel their economy.&#8221;



($1 = 132.5000 Kenyan shillings)



(Reporting by Rachel Savage in Johannesburg and Duncan Miriri in Nairobi; Additional reporting by Elias Biryabarema in Kampala, Joe Cash in Beijing, Nyasha Chingono in Harare, Chris Mfula in Lusaka and Felix Njini in Johannesburg; Editing by Joe Bavier and Alexandra Zavis)

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featured

South Africa heads for coalition as ANC set for big fall

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