Uncertainty Shadows Senegal’s Presidential Elections
Welcome back to the Vault.
After a needed holiday and New Year break, we are back to bringing you the latest updates across Africa, spanning topics from public policy to the most recent economic trends.
This week, we focus on the uncertainties in Senegal triggered by President Macky Sall’s decision to postpone the presidential elections. Additionally, we delve into last week’s policy rush by the Central Bank of Nigeria aimed at addressing the historic depreciation of the Naira.
As always, feel free to share your thoughts with us, check out our website for latest policies, and let us know if you need any insight on public policies, regulations, and guidelines in Africa.
Uncertainty Shadows Senegal’s Presidential Elections
In the lead-up to Senegal’s Presidential elections, Dakar is abuzz with heightened tensions and a cloud of uncertainty.
President Sall shocked the region last week by postponing the originally scheduled February 25 elections. Sall cited the necessity to address potential electoral issues, such as the constitutional council’s exclusion of some opposition candidates. While the Parliament considers August as a prospective alternative date, this decision has elicited concerns from opposition candidates, civil society organizations, and international observers. In response to the delay, some opposition figures have vowed to seek legal redress, escalating their discontent to public protests across Dakar over the weekend.
A field of 19 candidates planned to contest the election alongside the current Prime Minister, Amadou Ba, who has the backing of incumbent President Macky Sall. Other leading contenders include former Dakar Mayor Khalifa Ababacar Sall, former Prime Minister Idrissa Seck, whose service spanned from 2002 to 2004, and Bassirou Diomaye Faye, stepping into the role for the charismatic Ousmane Sonko, disqualified due to a court conviction for ‘corrupting the youth.’
The potential delay of the election underscores broader backdrop of challenges, raising doubts about the credibility of the electoral process. They could also reignite protests that took place in mid-2023 around the exclusions of opposition leader Ousmane Sonko. The country, region, and world will be watching to see how one of West Africa’s brightest democracies deals with the current turbulence.
Data Vault: CBN’s Naira Rescue Mission
The Naira fell to a historic low last week, exchanging at 1368 Naira/US$ in the official market. The unprecedented decline prompted the Central Bank of Nigeria (CBN) to initiate a frenzy of policies to halt the currency’s free fall.
Historic Fall
These policies are specifically aimed at enhancing FX inflows, stabilizing the Naira, and promoting a transparent market, with a focus on the supply side of the FX market.
- Limit on banks open position: the CBN issued a directive to all banks with a net open position exceeding 20% short (meaning they hold excess foreign exchange holdings) and exceeding 0% long (indicating that their holdings are more than their shareholders’ funds) to sell them off at a particular date (February 1, 2024) specified in a circular published by the CBN. This move is to stop speculative activities in the banking sector.
- Guidelines on FX report: CBN also released a circular to warn authorized dealers against reporting inaccurate and misleading information on FX transactions. This is a move to ensure transparency and that transactions are conducted on a willing-buyer-willing-seller basis.
- Guidelines on International Money Transfer Services: In a circular issued on January 31, the CBN removed the allowable limit quoted by international money transfer operators (IMTOs). The apex bank also provided a regulatory framework for authorized dealers, IMTOs and the general public. The framework provides stringent requirements of N10 million non-refundable application fee and minimum share capital of $1million for foreign IMTOs and the equivalent for indigenous money transfer operators. The regulation prohibits all banks and financial technology companies (fintechs) from operating International Money Transfer Services. However, banks can act as agents.
- Cash Reserve Requirement (CRR) policy: On February 2, the CBN in a letter to all banks announced that it has suspended daily Cash Reserve Requirement (CRR) debits. Instead, the apex bank has adopted an updated CRR mechanism intended to facilitate banks’ capacity to plan, monitor and align their records with the CBN. According to the letter, the determination of the segment of deposits subject to sterilization with the CBN as CRR will follow two phases.
- Incremental approach: The existing ratios (commercial banks 32.5% and merchant banks 10%) will apply to increases in the banks’ weekly average adjusted deposits.
- Increased lending: A 50% CRR levy will be imposed on banks that do not meet the minimum Loan to Deposit Ratio (LDR).
These regulations are accompanied by other strategic moves such as medium-term plans to introduce a singular foreign currency gateway bank to centralize all correspondent banking activities. CBN also disclosed that it has commissioned a forensic review and has started clearing legitimate foreign exchange (FX) backlog. The CBN is confident that implementation and adherence to its reforms are expected to address Nigeria’s FX challenges. To this end, it is revamping its communication strategy to ensure transparency in communicating monetary policies and introducing a feedback process on reforms.
What policy and insight do you seek?
Whether you are a government official, civil society organization, or researcher, our repository provides comprehensive access to public policies, regulations, and guidelines across Africa. We provide insights and intelligence on these regional policies and regulations for research, advocacy, policymaking, and investing.
Get in touch with us here: policyvault.africa.
What we are tracking
We’re also tracking the latest current events in the news, and how they may affect the decisions of policymakers. Below are some of the latest developments.
Niger | Bird flu outbreak declared in Niamey
Last week, Niger’s capital city-Niamey reported a fresh outbreak of the H5N1 strain of bird flu detected in local birds. The government declared through a decree dated January 30, that the city of Niamey is declared infected with highly pathogenic avian influenza (H5N1), over a radius of 10 kilometers.
Zambia| Zambia battles worst cholera outbreak in decades
Zambia is currently grappling with its worst outbreak in decades, and its vaccination rollout is facing pressure due to increased global demand for vaccine stocks. The outbreak in Zambia began in October and has been detected in nearly half of the country’s districts and in nine out of ten provinces. As of last week, the Zambia Public Health Institute reported 412 deaths and 10,413 recorded cases. In response to the outbreak, the Zambian government has initiated a mass vaccination program and is also providing clean water, with a daily supply of 2.4 million liters, to affected communities across the country.
Namibia | Vice President Nangolo Mbumba sworn-in as the nation’s new president
President Nangolo Mbumba was sworn in few hours after the announcement of the death of late President Hage Geingob on Sunday. The new president will serve in the role until elections due later this year.
Want more?
Check some of our recently published insights, which provide you with deeper analysis and context at the intersection of public policy and current events.
Reviewing Buhari’s Administration Cash Transfer Policy
President Muhammadu Buhari established a Conditional Cash Transfer (CCT) programme as part of the broad 2016 Social Intervention Scheme, part of a key campaign promise to reduce poverty through robust social intervention. The Minister of Humanitarian Affairs emphasized the success of the CCT stating in a press brief, that since 2015, over 1 million households (7 million persons) have benefited. However, looking at the overall data, the number of Nigerians in poverty has increased, from 40.1 percent in 2015 to 45 percent in 2023. This data suggests poor households are no better off now compared to 2015. In this article, we discuss some issues and challenges for this. Read more…
How Has Kenyan President William Ruto Fared Six Months into His Tenure?
Elected on the promise of a “Bottom-Up Economic Transformation,” President Ruto has taken several early actions in line with his pledges of economic transformation. He recently promised a KES50 billion annual commitment to the Hustlers Fund initiative —a financial inclusion fund to provide affordable credit to businesses, aimed at boosting economic growth and employment. He has also kept his promise on the housing and settlement plan by launching several affordable housing projects across the country. Read more…
Visit our website for more insights.
We’ve recently launched a complete redesign of the Policy Vault website, and we want YOU to tell us what you think: www.policyvault.africa