Emerging Markets Daily - March 31
Biden Announces Historic Oil Release, Imran Khan Defiant, Morale Ebbs Among Russian Troops, New East Africa Internet Cable, African Start-ups on M&A Spree
The Top 5 Stories Shaping Emerging Markets from Global Media - March 31
Biden Announces Historic and ‘Unprecedented’ Oil Reserves Release to Tame Prices
Bloomberg
“The U.S. will release roughly a million barrels of oil a day from its reserves for six months beginning in May, a historic drawdown underscoring White House concern about rising gas prices and supply shortages following Russia’s invasion of Ukraine.”
“President Joe Biden also will invoke Cold War powers to encourage domestic production of critical minerals for batteries for electric-vehicles and other uses, the White House said in a statement. Battery materials will join the list of items covered by the 1950 Defense Production Act.”
“The White House said that the release from the Strategic Petroleum Reserve was ‘unprecedented. This record release will provide a historic amount of supply to serve as bridge until the end of the year when domestic production ramps up,’ the White House statement added.”
“Biden will order as much as 180 million barrels released from U.S. reserves over the next several months. Pump prices are weighing heavily on the White House’s political prospects in November, when voters will decide whether Biden’s party will retain control of Congress. The president has struggled to tame both gasoline prices and broader inflation, which is at 40-year highs as the global economy adjusts from pandemic disruptions.” Bloomberg reports.
Defiant Imran Khan, Citing Foreign Conspiracies, Says He Won’t Resign
NDTV
“Pakistan Prime Minister Imran Khan, reduced to a minority in the assembly and fighting to remain in power, today refused to resign and alleged that there is a foreign conspiracy working against his government. There are enemies inside the country who are cooperating with them, added Mr Khan, who has virtually lost majority in the 342-member National Assembly after defection of two key allies.”
"‘We are getting messages from some foreign countries... They say that they will forgive Pakistan if Imran Khan goes,’ he said in an address to the nation this evening, amid a buzz about backdoor efforts to reach a deal between the premier and the joint opposition to dissolve the lower house.”
“Mr Khan, 69, however, indicated that he would fight - ‘till the last ball’ -- instead of resigning or cutting a deal. Referring to the vote of confidence on Sunday, he said that is when the ‘country's future will be decided’. Mr Khan's Pakistan Tehrik-e-Insaf (PTI) needs 172 votes in the lower house of 342 to foil the Opposition's bid to topple him. The Opposition has claimed that it has the support of 175 lawmakers and the Prime Minister should immediately resign.”
“If Mr Khan is unable to prove his majority in Sunday's vote, he will be the first Prime Minister in the country to be ousted through a no-confidence motion. Referring to the conspiracy, which he first mentioned three days ago, Imran Khan alleged on national television today that there have been messages that ‘if they fail to oust me, Pakistan will have to face difficult circumstances’.” NDTV reports.
Morale Falling Among Russian Troops in Ukraine
Financial Times
”Morale among Russian troops fighting in Ukraine continues to suffer amid growing dissatisfaction across all ranks, the head of the British armed forces said, although that discontent is still far from turning into a substantial revolt.”
“‘We are, unsurprisingly, seeing disquiet at all levels within Russia’s armed forces,’ said Admiral Tony Radakin, chief of the defence staff, the UK’s most senior military officer. ‘You’ve seen it at the most junior level . . . We are also seeing the pressure that exists with their tactical and operational commanders . . . and then you get up to their most senior commanders who are clearly under pressure too.’”
“Reports of a brigade commander being run over by his own troops, widespread videos posted on social media of grumbling Russian soldiers, and the firing of 12 national guardsmen who refused to fight in Ukraine have fed speculation that parts of the Russian army may be close to mutiny.”
“But Radakin cautioned that ‘mutiny’ was a strong word — ‘the naval officer in me twitches when I hear the word’ — and added that ‘we are going to have to wait and see’ whether the widely reported discontent inside the Russian army ‘evolves into something more impactful’.” John Paul Rathbone reports.
Kenya Launches Major New Internet Cable, Supporting Digital Economy Growth
The East African
“Thirteen years since Kenya welcomed its first ever fibre optic cable, the country has now unveiled a sixth submarine internet cable that promises to offer higher speeds, lower latency and broader bandwidth.”
“The launch of the Pakistan and East Africa Connecting Europe (Peace) cable on Tuesday comes at a time when the country’s internet economy is rapidly growing, thanks to digital transformation acceleration occasioned by the Covid-19 pandemic.”
“As demand rises for cloud storage, heavy internet content streaming, e-commerce platforms, e-learning apps, telehealth systems, fintech innovation and online businesses, the new cable is expected to offer additional broadband to the national fibre backbone network.”
“The $399.9 million cable connects Africa to France and Pakistan through the Europe-Asia route, providing a direct connectivity to Asia which is expected to reduce communication delays between Africa and Asia.”
“The launch is a partnership between Peace and Kenya’s most affordable mobile internet data provider Telkom, which creates optimism that mobile data could soon be more affordable. Kenya has the most expensive mobile data in East Africa according to the global Mobile Data Index.” Faustine Ngila reports.
Buy or Get Bought: African Tech Is on a Major M&A Spree
Rest of World
“When Casablanca-based Chari, a B2B e-commerce startup, announced it was acquiring Axa Credit, the loans division of Axa Assurance Maroc in Morocco, the $22 million price tag wasn’t nearly as surprising as the fact that a barely two-year-old startup was buying out part of a global insurance giant.”
“It wasn’t even Chari’s first acquisition. In October 2021, the company, which digitizes the supply chain for informal retailers in Morocco and Tunisia, quietly snapped up another local startup named Karny, which provides credit and bookkeeping services to small businesses. According to Chari CEO Ismael Belkhayat, the startup is also in the process of closing a third acquisition, with two more on the horizon.”
“….The trend is too early to be captured in data, but it’s clear that merger activity has picked up in the tech sector in Africa. Deals in the last month include Nigerian B2B e-commerce player TradeDepot’s acquisition of its Ghanaian analogue Green Lion, Kenyan insurtech company Lami’s buyout of rival Bluewave, and South African payment startup PayJustNow’s sale to Mauritius-based Weaver Fintech.”
“Many other smaller, unannounced deals have also been happening on the sidelines of tech, and industry insiders told me that more are coming…The trend is partly a function of how much venture capitalist money is sloshing around African tech. In 2021, aggregate venture funding hit a record high of $4.6 billion, and it’s not slowing down, according to the research consultancy Africa: The Big Deal, which estimates that funding deals have already topped $1 billion in the first seven weeks of 2022.” Yinka Adegoke reports.
“You must live in the present, launch yourself on every wave, find your eternity in each moment. Fools stand on their island of opportunities and look toward another land. There is no other land; there is no other life but this.”
―Henry David Thoreau