Morocco has been invited to consider joining the Gulf Cooperation Council (GCC), the economic bloc that ties together Kuwait, Saudi Arabia, Bahrain, the UAE, Oman and Qatar. Attempts to explain the rationale behind this are bringing out a variety of opinions but what seems to be the most likely driver behind this is that the cash-rich GCC takes a more strategic view on creating a bigger and more independent economic bloc. Such a union would result in a higher headcount which translates into a larger and more diversified economic club. Additional reasons that support the rationale are access to western Africa, skilled labor, proximity to Europe, etc. Jordan has also arisen as a possible member of this union.
Some would rush to say that such a union would be absurd given the differences between the regions. Then again, the same could have been said over half a century ago with regards to a political and economic union between the various parts that today form the European Union. This wider Middle East-North Africa union would be one of the most vivid expressions that the ancient inter-regional economic connections are increasingly being re-established. As you certainly know, the Silk Invest name has its origins in our belief that the economic dynamics of the Silk Road that connected Asia, Africa, the Middle East and Europe, have again become a reality.
Nigeria is in the process of setting up a sovereign Wealth fund. After a successful election, Africa’s most populous nation is again focused on its progress. Even Fitch ratings have upgraded their outlook on Nigeria.
In Kenya, it will soon be possible to watch satellite television on smart phones. The innovative spirit of the Kenyan companies continue be fascinating.
Egypt’s foreign currency reserves remain stable at around US$30 billion, this is impressive considering all the pressure this economy has been under.
The Frontier Fixed Income markets have been performing well. Yields are trading lower in the MENA now that things have calmed down on the social front; either that or it has lost ‘breaking news’ status. We are again seeing hedge funds sniffing around for yield in these markets. Bond issuance activity has again come to life now that things have stabilized while yields have consolidated at lower levels.
A more detailed comment about the above can be found on the Silk Invest website
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