Welcome to Next Africa, a weekly newsletter of where the continent stands now — and where it’s going next.

William Ruto’s push for the Kenyan presidency got a boost, and he has the Court of Appeal to thank.

The judges  threw out President Uhuru Kenyatta’s proposed constitutional amendments, including reintroducing executive positions such as a prime minister and deputies that many saw as a way to reward future alliance partners. They are also seen as a veneer to keep Ruto from ascending to the top job after next year’s elections.

The reforms were backed by opposition leader Raila Odinga, with whom Kenyatta has recently allied with. That partnership sidelined Ruto, the deputy president who had expected that 2022 would be his year in exchange for supporting the president in the last two votes. The relationship between the two leaders has since  soured.

Kenyatta and Odinga argue that the proposals, if implemented, would end the ethnic violence that’s plagued Kenyan politics for decades, by sharing ruling positions more equitably. While Kenyatta can’t run again, he could have had more influence over the choice of his successor — most likely Odinga.

Ruto lauded the ruling as a win for the ordinary Kenyan against the elite. Kenyatta is the son of the former British colony’s first president and Odinga is the offspring of the first vice president. 

While that may strike a chord in a nation where the top positions have been closely guarded by a small ruling class, Ruto himself is one of the country’s richest people. 

Still, with Kenyatta and Odinga losing their  trump card — the offer of executive positions to smaller political groups — Ruto can build his own political formation.

The race is far from decided, but Ruto is once again on track.

News & Opinion

New Start | In his first speech as Zambian president, Hakainde Hichilema pledged to lift economic growth and  restore the nation’s financial credibility. The businessman and cattle rancher who turned to politics in 2006 takes over an economy buckling under record levels of external debt that led to Zambia becoming Africa’s first pandemic-era sovereign defaulter. His election win has been a boost for bond investors and the nation’s currency is the world’s best performer in August. 

Paying Off

Investors who bought Zambian debt after the default are reaping the reward

Source: Bloomberg

Tax Fight | A dispute between Nigerian tax authorities and MultiChoice intensified this week, showcasing the risk international firms face as the continent’s largest economy tries to bolster revenue collections. The government is claiming Africa’s biggest pay-TV provider owes $4.4 billion in back taxes and should pay half of that while it challenges the case in court. The argument is reminiscent of mobile-phone operator MTN being slapped with a $5 billion fine in 2015.

Hunger Season | Madagascar is on the brink of a severe humanitarian crisis as hundreds of thousands struggle with the impact of its  most severe drought since 1981, according to United Nations officials. Insufficient rains since 2019 in the island nation’s southern regions have forced people to resort to desperate measures such as “eating locusts, raw red cactus fruits or wild leaves” according to ReliefWeb, a UN information service. Madagascar is the world’s largest grower of vanilla, most of which is produced in the northeast of the globe’s fourth-biggest island.

IMF Windfall | Zimbabwe will use more than half of the $961 million it has been allocated by the International Monetary Fund in special drawing rights to support its beleaguered currency, Finance Minister Mthuli Ncube said in an interview. The local dollar’s weakness, and even bigger plunge on the black market, has made it difficult for the government to get it accepted locally, and it’s generally not tradable outside the country.

Sugar Probe | Groupe Castel has started an inquiry into a report that said a unit of the French beverage maker aided militia accused of “mass atrocities” in the Central African Republic in exchange for the security of its sugar assets. The announcement by Castel came after The Sentry, a Washington-based anti-corruption group co-founded by actor George Clooney, published a 28-page investigation into the sugar-producing unit. CAR, one of the world’s least-developed countries despite diamond and gold deposits, has been beset by conflict since 2013.

Past & Prologue

Data Watch

• Nigeria’s economy expanded by 5% in the second quarter. While it was the fastest annual growth since 2014, it was slower than expected and reflected declining demand for oil from Africa’s top crude producer.
• South Africa’s economy is 11% — or $37 billon — bigger than previously thought. The statistics agency’s revamp of how it calculates gross domestic product also means that debt metrics will improve. The agency also found that unemployment climbed to a new record high.

Unwelcome Record

South Africa's jobless rate is the highest tracked by Bloomberg

Source: Statistics South Africa, Bloomberg

Note: Some data are for different periods

• The number of people testing positive for Covid-19 has surged in Lagos, Nigeria’s commercial hub. The positivity rate jumped to 12.1% this week. 

• Nigeria’s state-owned oil company posted a profit for the first time since it was established 44 years ago. The Nigerian National Petroleum Corp. made 287 billion naira ($698 million) in 2020.

Coming Up 

• Aug. 30 South Africa monthly budget balance for July
• Aug. 31 Kenya and Uganda inflation for August, South Africa trade & money supply data for July, Harmony Gold and Old Mutual earnings
• Sept. 1 Zambia interest-rate decision, Nigeria purchasing manager index, South Africa manufacturing PMI & new vehicle sales data
• Sept. 2 PMIs for Kenya, Zambia, Ghana, Mozambique, South Africa and Uganda, Impala Platinum and Discovery earnings

Last Word

A South African company is considering an initial public offering in the next year after becoming the first in the country to win the right to grow, process and package cannabis products. Cilo Cybin Pharmaceutical, named after the psychoactive substance in magic mushrooms, was certified by the regulator and will now be able to produce medicinal marijuana for sale to consumers around the world. The money raised will partly be used for its cannabis business, which uses a strong local strain called Durban Poison with high levels of tetrahydrocannabinol, or THC, the main psychoactive chemical. Cilo Cybin has built a high-tech, indoor growing facility that can produce about 100 kilograms (220 pounds) of cannabis flour a month. Meanwhile, the government unveiled a master plan to harness a $1.9 billion cannabis industry that could potentially create as many of 25,000 jobs and help attract foreign investment.