Flash Briefing: Mozambique president named in corruption scandal; Zuma refuses to testify; vaccines; SA equities

  • Corruption in Southern Africa is a key theme in world headlines, with Mozambique President Filipe Nyusi placed at the centre of a $2bn debt scandal that led to a debt default. Court documents filed in London reveal that a shipbuilding company and a French-Lebanese businessman made payments to Nyusi and other senior officials after negotiating contracts for government maritime projects, says Bloomberg. The case relates to $2bn in loans Mozambique borrowed from banks including Credit Suisse Group AG in 2013 and 2014 to pay for a coastal-protection system and a tuna-fishing fleet. Nyusi was the ruling Frelimo party’s candidate for president at the time a payment was made to him in April 2014, Nyusi wasn’t president at the time the payment was made and under Mozambican law was allowed to receive political donations, a Frelimo spokesman said. The scandal led the IMF and a group of European donors to halt financing to the government in 2016, and the following year the nation defaulted on its debt. US prosecutors in 2019 said the projects were part of a fraud and money-laundering scheme that victimised US investors. Three former Credit Suisse bankers pleaded guilty in the case.
  • In South Africa, former president Jacob Zuma – the central figure in R500bn, or $33bn, lost to corruption – is refusing to testify at the Zondo Commission into State Capture, reports Bloomberg. “The Commission Into Allegations of State Capture can expect no further cooperation from me in any of their processes,” Zuma said in a statement on Monday. “If this stance is considered to be a violation of their law, then let their law take its course. I do not fear being arrested, I do not fear being convicted nor do I fear being incarcerated.” The Constitutional Court ruled on Jan. 28 that Zuma must testify before the panel headed by Deputy Chief Justice Raymond Zondo. Zuma, who has accused Zondo of bias and unsuccessfully sought his recusal, walked out of a panel hearing in November and refused to answer questions.
  • The aeroplane carrying South Africa’s first Covid-19 vaccine doses landed at the OR Tambo international airport in Johannesburg on Monday, state broadcaster SABC reported, as the country prepares to roll out an immunisation campaign. President Cyril Ramaphosa and other top officials were at the airport to receive the 1 million doses, after some scientists publicly criticised the government for not securing shots sooner, says Reuters.
  • South African equity analysts are predicting a strong year for JSE-listed companies. “A historical low interest rate environment in South Africa and unprecedented levels of monetary and fiscal policy stimulus globally should be a supportive underpin for local equity markets, despite the pullback we have seen the past week,” John Storey, head of South African equity research at JPMorgan, is quoted as saying. Even after their strong start to the year, South African stocks still offer enticing valuations: they trade at the biggest discount to developing market shares since 2005 when Bloomberg started tracking the data. “Our equities are among the cheapest in the emerging market universe at a time when emerging markets are already very cheap relative to developed markets,” Shaun le Roux at PSG Asset Management in Cape Town, reportedly said in a note to clients.

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