NBAD Middle East & African Monitor - 08 March 2017
Iran’s hardliners increase pressure on Rouhani ahead of elections
With Iran’s Presidential elections now only two months away, the current incumbent Hassan Rouhani, is facing an increasing challenge from hardliners within the regime as he prepares to stand for re-election. The latest verbal attack on his administration came from Ayatollah Ahmad Jannati, who is the head of Iran’s ‘Assembly of Experts’ and who openly criticized Rouhani for the perceived failure of the nuclear accord to generate a significant boost to the country’s economy thus far. “If the resistance economy has not been followed in the way that it should and must have been, then he must apologize and tell us the reasons,” Jannati was quoted as saying by Iran’s state media this week. Meanwhile Rouhani has begun trying to woo Iranian voters, especially young urbanites, by hinting at more social freedoms; “We need to make people more aware of their rights than in the past. When an investigator asks about people’s private lives they should stand strong and say ‘this is my private area and you don’t have a right to ask me about my private life.’ We shouldn’t interfere in people’s private lives and shouldn’t search them,” Rouhani stated on Tuesday. As mentioned in our previous commentaries on the subject we think Rouhani will manage to secure a second term in office, especially as those opposed to him have not yet grouped around one specific conservative candidate, however with a Trump White House strongly indicating its desire to take a more aggressive stance on Tehran, the regime’s hardliners could begin to gain some political steam.
Saudi King cancels trip to Lebanon
According to a Gulf News article, King Salman bin Abdul Aziz Al Saud allegedly cancelled his upcoming trip to Lebanon following comments made over the status of Hezbollah by the Lebanese President, Michel Aoun, during a recent Egyptian TV interview. The King’s planned visit to Beirut was hoped to be another step in recent attempts to improve relations between the two countries, “The visit was supposed to give Lebanon a strong moral and political boost from Saudi Arabia and other Gulf Cooperation Council states, and ensure the unconditional return of Arab and Gulf tourists to Beirut. It was to be accompanied by tangible economic support for the Lebanese state,” an unnamed Saudi source was quoted by the newspaper as saying.
Nigeria unveils economic stimulus plan
Nigeria’s Budget and National Planning Ministry released the government’s three-year ‘Economic Recovery & Growth Plan’ yesterday which includes; Government funding for key infrastructure projects such as power generation, assisting the development of non-oil related industries and SMEs, job creation, fiscal stimulus and monetary stability. Some specific steps to be taken are; An increase in the current 5% VAT rate on luxury goods to 15% from next year, amending and streamlining the tax collection system by introducing updated technology, removing bureaucratic red-tape, revamping local refineries in order to reduce the need to import petroleum products by 60% within 2 years, boosting and transforming the agricultural sector to ensure domestic food security and making Nigeria a net exporter of rice, nuts and vegetable oil by 2020. A spokesperson for the ministry, was quoted in the local media as saying that the plan’s vision was to drive the structural economic transformation of Nigeria with an emphasis on improving efficiency in both the private and public sectors. On the face of it the plan is encouraging, however effective implementation will be the key to its success or failure. You can access the entire program in detail here.
Meanwhile President Buhari is reportedly still receiving treatment overseas for an undisclosed illness, he has been in London since the 19th of January and officials are still unable to confirm when he will be declared well enough to return to Nigeria.
Demand for oil is “Improving” – Saudi Energy Minister
Saudi Arabia’s Energy Minister, Khalid al Falih, claimed during a conference in Houston yesterday that the overall fundamentals drivers for oil were improving and dismissed talk of peaking demand, although he also cautioned against “irrational exuberance” by investors. "There is cause for cautious optimism as we see the green shoots of the recovery, and misguided projections of peak oil demand discourage investment as the International Energy Agency has warned. Demand for petroleum exports will continue to grow, with much of this growth coming from Asia," al Falih stated adding; “Uncertainty will continue until global inventories rebalance, however we expect oil demand growth to remain fairly healthy at 1.5mio bpd.”
Saudi Arabia plans domestic SUKUK issuance
According to various media reports, Saudi Arabia is planning to issue SAR denominated Islamic bonds this year in an attempt to boost the Kingdom’s SUKUK Market. Meanwhile the country is also expected to conduct a US dollar denominated Islamic issuance within Q1 of 2017.
Tanzania’s CB slashes main interest rate
Tanzania’s Central Bank cut its benchmark discount rate by 400bp to 12.00% this week in an attempt to stimulate lending. The move follows a warning by the IMF earlier this year that the government’s tight fiscal and monetary policies were threatening its economic growth target.
Credit Agricole mulls sale of stake in BSF
Credit Agricole SA is reportedly considering selling its 31% stake in Banque Saudi Fransi the Kingdom’s 5th largest bank, according to a Bloomberg article published last night.
UAE could become home to the world’s first operational ‘Hyperloop’ passenger transport system
A new high-tech transport system which uses magnetic levitation could be operational in the UAE within 5 years according to the CEO of the US based Hyperloop company. “Having signed an agreement with DP World in August to pursue a cargo-based Hyperloop One system at Jebel Ali Port, our focus has now expanded to include connecting the Emirates. As a central global transport hub, pursuing the implementation of a Hyperloop in the UAE makes sense, the leaders of the UAE understand that transportation is the new broadband, with the power to transform life throughout the GCC. We are now at a stage where, from a technological point of view, we could have a Hyperloop One system built in the UAE in the next five years," Rob Lloyd was quoted as saying by the National newspaper.
The UAE has entered the world’s top 20 list of countries with the highest concentration of ultra-rich individuals. The UAE ranks at number 19 on the Hurun Research Institute’s latest list of countries having the most billionaires, with China and the US topping the chart.
Glenn Wepener, Executive Director & Geopolitical Analyst Middle East & Africa
National Bank of Abu Dhabi
Tel: +971 2 6110 127
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