From Coalitions To Currencies To Celebration, Thoughts On The Continent

Published 1 year ago
Rakesh Wahi

When I was packing my bags to leave South Africa at the end of November 2022, the country was going through political lobbying and hobnobbing that seemed to be far more fragmented than I had witnessed from my first visit in 2004. As I had predicted in 2004/5 and have spoken and written about for years, the time for true democracy in the country has come. This is not about any one individual or event, but history is evidence that nations emerging from any oppression or a change in system take time through disillusionment, to cast their old beliefs/misplaced loyalties and embrace change. The greatest example of this political change was seen in India that has gone through a very similar transition in its political system after 1947.

The Indian National Congress party lost national consensus in 1977 (30 years post-Independence), after which there was a long era of coalition governments the most successful of which was the BJP-led alliance from 1999 to 2004. No other coalition government between 1977 and 1999 managed to survive a complete five-year term in office. The Congress Party in India was almost annihilated in the 2019 elections when the party failed to secure 10% in parliament (less than 50 seats in a house of 543). It took 30 years to lose power and 72 years of dynasty politics for the party to be completely routed through implosion. There is no better lesson in political history than this experience to learn from. As I had written in 2021, the era of coalitions is likely arriving in South Africa and so has the emergence of new political parties that will provide the checks and balances that are desperately needed. There will be expected fragmentation in the provinces; the jury is now out whether the ruling but bankrupt African National Congress (ANC) will be able to hold on to a 51% electoral majority vote in 2024. Sadly, this process will bring with it a period of continued uncertainty and indecisiveness further compounding the problems that the country already faces.

Interestingly, there are about 25 African countries that are going to polls in the next two years. Amongst many others, these include Nigeria, Zimbabwe and Gabon in 2023 and South Africa, Botswana, Mozambique, Namibia, Mauritius, Rwanda, Ghana and Ethiopia in 2024. This is therefore, going to be an exceedingly important phase in the African continent where people will exercise their vote, after the pandemic, when being faced with growing unemployment, food, water and power shortages, growing economic disparity and increasing corruption. 2022 was also a telling year in Africa when the voters in Kenya surprised everyone by electing President William Ruto who defeated Raila Odinga, in a stark departure from historic dynasty politics.


In a paper published by the Africa Center for Strategic Studies in September 2022, research associate Paul Nantulya wrote: “Kenya’s 2022 general election has not followed the familiar script of voters exercising their civic duty only to helplessly sit back and watch their votes be manipulated. Kenyans have attempted to correct this through comprehensive constitutional reforms, an active and vigilant citizenry, and an increasingly independent judiciary. In the process, Kenyans have carved out a roadmap for themselves and democratic reformers across the continent to follow to enhance the integrity and legitimacy of their electoral process.”

These words are going to echo and reverberate in many countries as they head towards greater governance and accountability. The power of the people cannot be underestimated or their benevolence taken for granted in perpetuity. Their patience will run out bringing about the much-needed change. Ruling parties should pay heed to the needs of their people and take action that will create opportunity for greater good and not benefit a small section of society.

In addition to the expectation of these results for nationals, this is going to be a period of anticipation for investors into Africa. Over the last few years the common theme from Africa has been about the growing population that will bring about exponential growth rates and consequently economic opportunity. Every sector is expecting rapid growth to cater to the growing consumer demand. Other than historic investments in mining and extractive ventures, peers are gearing up for additional investments into infrastructure, industry, agriculture, power generation and distribution, education, retail and many other sectors. Technology and innovation are also playing a critical role in disrupting business models in retail, communications and banking. The outreach activities from African countries into the Middle East (a region known to be a net exporter of capital) are higher than ever before. This is a good time for policy-makers to ensure that on one hand, a more investor-friendly approach (including but not limited to simplifying visa procedures) is taken but on the other, incentives must only be given for long-term investments, industrial development and beneficiation. African economies will never be able to stand on their feet if raw material/minerals or agricultural produce continue to be exported and no value-added industries are set up locally.

A major risk in Africa remains currency risk. Some of the major economies that have fared badly are Nigeria, Ghana and South Africa. The Ghanaian Cedi in particular took a bruising starting at about Cedi6 to the US$ at the start of 2022 and ending the year between Cedi12-14 to the US$. The Nigerian Naira has devalued almost 50% since 2020 and remains a very volatile currency with no end in sight. The bigger problem in Nigeria remains remitting funds out of the country where businesses and individuals can lose up to 30% value while buying US dollars in the open market. The South African Rand has also remained extremely volatile. When we invested in 2006/2007, the Rand was at approximately ZAR6 to a US$ and is currently trading around ZAR17 to a US$. This volatility, coupled with the high-interest rates, particularly in West Africa, makes business expensive, unpredictable and unattractive particularly for foreign investors. The situation is not getting any better as borrowings are continuing to increase with countries like South Africa, Kenya, Ghana and Rwanda having debt to GDP ratios of between 70% to 100%; while these numbers are not as alarming as those of Japan, US, Singapore or other European countries, the ability of most African countries to repay debt is questionable. This forces inequitable negotiations with lenders that is continuing to impact growth.


It is evident that the continent will continue to suffer the historic maladies as mentioned above. This can however, slowly but surely, be mitigated through fiscal discipline, policy reforms and good governance. Key is the political will to make it happen.

While we have learned to deal with and live with Covid, we must not forget the experiences of the last 24 months. China has finally abandoned its zero-Covid policy that is likely to have an adverse impact as there will be a wave of visitors likely traveling all over the world. While this will give a boost to the tourism sector, it is possible that we may see a spurt of fresh strands of Covid in our midst.

I would advise against throwing caution to the wind; people must continue to behave responsibly and adhere to Covid protocols to prevent the spread of the pandemic. A lot of countries are watching the news coming from the East and some travel protocols are being put in place to ensure that tests are carried out as well as the mandatory vaccination certificates that are now a part of travel documents everywhere.

On the festive side, Dubai was at its colorful best during the year-end break between Christmas and New Year’s Eve. The city reportedly attracted over 12 million tourists in the first nine months of 2022 and possibly over 16 million for the year getting close to its pre-Covid numbers and re-establishing itself as one of the preferred global holiday destinations. The numbers in the last quarter were definitely skewed because of the FIFA World Cup in Qatar when a large number of spectators camped in Dubai and took advantage of the incredible logistics that had been set up by the Dubai Tourism department to ensure that there was sufficient hotel capacity and flights between Dubai and Doha. New Year’s Eve was a fairy tale experience, like every year, with thousands of visitors gathering to watch the fireworks at various landmark sites across the city; the most prominent of which was Burj Khalifa. There is not a single bit of real estate in Dubai that is not lit up to celebrate the coming of the New Year in an inclusive manner and without any incidents of crime or unpleasantness.


I often wonder why we are unable to get this kind of celebration in Africa. Although the continent has so much to offer, Africans leave behind this rich heritage and natural beauty and converge to other destinations around the world. As an example, Johannesburg is a dead city during New Year’s Eve. So much could be done to create magic in such a wonderful setting as in Johannesburg, Cape Town, Durban, Nairobi, Kigali and so many other exotic destinations across the continent.

What would it take to transform some of Africa’s main cities into tourist destinations with activities for families so that African culture and cuisine can be sampled by people from around the world? This needs to change and we need to make sure that African gems do not remain best-kept secrets; when visitors experience the rich culture, game reserves, sports, beaches and the warm African hospitality they will spontaneously and deliberately make the continent a destination for leisure, hospitality and consequently business. Wishing all our readers a very prosperous and healthy 2023.