Welcome to Next Africa, a twice-weekly newsletter on where the continent stands now — and where it’s headed. Sign up here to have it delivered to your email.

South Africa’s economic prospects are finally looking up after more than a decade in the doldrums. 

A business-friendly coalition government took office after May elections failed to produce an outright winner, sparking a rally in the nation’s currency, bonds and stocks. And after being subjected to rolling blackouts since 2008, businesses and households have had seven straight months of uninterrupted electricity. 

Reforms that will give individuals early access to part of their retirement savings have also been introduced, which along with lower interest rates should boost spending.

Enoch Godongwana. Photographer: Leon Sadiki/Bloomberg

That provides a positive backdrop for Finance Minister Enoch Godongwana to deliver the new administration’s first budget update on Wednesday. Economists expect him to upgrade his economic-growth forecasts and stick to previously announced targets to contain state debt and reduce the fiscal deficit.

With President Cyril Ramaphosa having pledged to turn the country into a giant construction site, Godongwana is set to unveil a credit-guarantee facility that’s intended to lure the private capital needed to modernize and expand the energy, rail, port and water supply networks. 

While the initiative will be welcomed, the government will need to do more to encourage investment, including tackling logistics bottlenecks and fixing malfunctioning municipalities, according to Anchor Capital analyst Casey Sprake. 

“We need to see tangible reforms,” she said. “We need to see this over a period of time and not just this flash in the pan.”

The central bank has identified a sustained increase in real net investment as key to turning around an economy that’s grown by an annual average of less than 1% over the past 10 years and tackling a 33% unemployment rate. 

Clearly Godongwana still has a mountain to climb, but at least he may finally have some good news to share. — Ntando Thukwana

Key stories and opinion:
South African Budget Eyed by Investors for Further Reform Steps
South Africa’s Bonds Sizzle in Lackluster Market for EM Debt 
Reforms in Spotlight as South Africa Woos Foreign Investors 
South Africa’s Coalition Government Triggers Wave of Investment
South Africa Bonds Prove Democracy Invaluable: Matthew Winkler

Militiamen went on the rampage in Sudan’s Al-Jazeera state, as the United Nations decried indiscriminate shootings of civilians and acts of sexual violence in the North African nation. Middle Call, a Sudanese rights group, said it had documented 124 people who died at the hands of the Rapid Support Forces, while at least 150 were abducted over a six-day period this month. Fighting between Sudan’s military and the RSF erupted 18 months ago after both sides refused to forge a power-sharing deal and hold elections.

Smoke rises over central Khartoum as the Sudanese army stages air strikes on the RSF. Photographer: AFP/Getty Images

Nigeria’s currency fell the most in about two weeks to a record low on Monday after a steep drop in liquidity in the foreign-exchange market. Dollars have been in short supply as the West African nation prioritizes building its reserves, which stood at $39.4 billion this week — the highest in about two years. Africa’s largest crude producer has struggled to stabilize its currency since it was allowed to trade freely against the dollar in June last year. The naira is the third-worst performing currency in the world this year after the Lebanese pound and the Ethiopian birr. 

Zimbabwean President Emmerson Mnangagwa declined an offer by the ruling party to extend his term of office by two years until 2030. While the Zimbabwe African National Union-Patriotic Front adopted a resolution to prolong his tenure, Mnangagwa said even he wasn’t above the party’s constitution and would vacate his post in 2028. Zanu-PF agreed that the bullion-backed ZiG currency should be the country’s sole legal tender and the use of US dollars must be phased out. It didn’t give a timeline for the change.

Emmerson Mnangagwa. Photographer: Waldo Swiegers/Bloomberg

Senegal’s funding program with the International Monetary Fund needs to be reworked after an audit showed its debt and budget deficit were higher than previously reported. The government aims to meet all the conditions to reach a new agreement with the lender by the first quarter of 2025, Finance Minister Cheikh Diba said at the IMF’s annual meeting in Washington. A review of Senegal’s finances during the last five years of ex-President Macky Sall’s rule showed its outstanding loans and fiscal gap were understated. Sall denied the numbers were incorrect. 

Mozambican law-enforcement officials opened a criminal case against opposition leader Venâncio Mondlane after his supporters torched a police station in the northern Nampula province in the wake of violent protests over claims of fraud in Oct. 9 elections. One person died and two were kidnapped, while 21 officers were injured, according to the police. The incident is one of many that have occurred since the vote, which observers said was marred by ballot-box stuffing and other irregularities.

Protesters confront security forces in Maputo on Oct. 24. Photographer: Alfredo Zuniga/AFP/Getty Images

African countries face higher costs of financing because of inflated risk perceptions from credit-ratings companies, according to the head of the continent’s biggest bank. A UN Development Programme study published last year showed that subjective risk assessments by ratings companies resulted in $75 billion of added costs and foregone revenue for governments on the continent, Standard Bank Chief Executive Officer Sim Tshabalala said. He described the extra spending as “preposterous” and “unconscionable.”

Thank you for your responses to our weekly Next Africa Quiz and congratulations to Adza Stella Vajime, who was the first to name South Africa as the country in a dispute with Taiwan after it requested Taipei to move its representative from the capital.

Chronic power outages hobbled South Africa for years, costing the economy as much as $52 million a day, according to central bank estimates. Now, the situation appears to be stabilizing. Recent and longstanding reforms are taking effect and have radically improved employee morale at state power utility Eskom, according to experts, analysts and officials. A decision to delay the shutdown of three coal-fired power plants also played a big role.

Thanks for reading. We’ll be back in your inbox with the next edition on Friday. Send any feedback to mcohen21@bloomberg.net