Frontier Markets News, January 28th 2024

Welcome to the latest edition of Frontier Markets News. As always, we would love to hear from you at with news ideas, feedback and anything else you find interesting.

Sent this by a friend? Sign up here to receive FMN in your inbox every weekend.

By Ken Stibler, Noah Berman and Nojan Rostami. Executive editor: Dan Keeler


Blinken tours West Africa

US Secretary of State Antony Blinken visited four African countries this week, seeking to reaffirm U.S. engagement on the continent amid attention-diverting wars in Europe and the Middle East.

Blinken visited Cabo VerdeCôte d’IvoireNigeria, and Angola, announcing millions in aid along the way. In Côte d’Ivoire on Tuesday, he pledged $45 million in additional U.S. aid to help prevent conflict in West Africa, where a series of recent coups have threatened to destabilize the region. 

Antony Blinken with Angola’s President Joao Lourenco. Photo: AP via VoA

Blinken also discussed democracy and stability with leaders in Cabo Verde, talked with Angola’s president about the prospects of peace between sparring Democratic Republic of the Congo and Rwanda, and emphasized the need for regional security with the president of Nigeria, Voice of America reports. In each country, Blinken also highlighted economic cooperation initiatives, the New York Times reports. One such project is a railway that will connect landlocked DRC and Zambia to an Angolan port.

The visit was Blinken’s fourth to sub-Saharan Africa, where China and Russia are also jostling for influence.  

DRC and China consider $7 billion financing deal

The Democratic Republic of the Congo and China are discussing a minerals-for-infrastructure arrangement worth $7 billion, DRC President Felix Tshisekedi said.

A cobalt mine in DRC. Photo: Lucien Kahozi/Bloomberg

The deal would restructure a 2008 contract that saw China agree to build infrastructure in DRC in exchange for copper and cobalt. Less than one-third of the $3 billion China agreed to provide was ever disbursed, even as the country collected the minerals produced in DRC mines, Bloomberg reports. The DRC is now looking to correct that deal, which Tshisekedi criticized as unfair, but independent experts say the new agreement still favors China and resolves few of the original contract’s problems, Voice of America reports.

DRC has massive supplies of copper and cobalt, minerals that power technologies essential for a global transition away from fossil fuels. China is by far the DRC’s largest trading partner.


Southeast Asian currencies sink amid Chinese economic slowdown

Currencies in IndonesiaMalaysiaThailand, and the Philippines skidded this week, underscoring the regional impact of China’s ongoing financial tumble. The Indonesia rupiah, Malaysian ringgit and Philippine peso all fell to three-month lows on Wednesday, Nikkei reports. The Thai baht sank to a two-month low. 

Many Southeast Asian economies depend on Chinese demand and are indebted in US dollars, laying a vulnerable foundation for their currencies. China’s economy has sputtered in recent months, with a struggling property sector and high youth unemployment. Meanwhile, the US has kept interest rates high to combat inflation, putting pressure on countries that have significant dollar-denominated debts.

SE Asian banknotes. Photo: Akira Kodaka

Domestic political factors could also be weakening some of these currencies; the rupiah slid this week after reports emerged that Indonesia’s finance minister would soon exit, while the fragile government of Malaysian Prime Minister Anwar Ibrahim has pushed down the ringgit, Bloomberg reports.

Sri Lanka imposes sweeping internet regulation

Sri Lankan lawmakers passed an online regulation bill on Thursday that rights groups fear will lead to a crackdown on free speech. 

The law will create a five-member body with the power to order individuals and internet service providers to remove posts that include “prohibited content,” CNN reports. Members of the regulatory commission will be appointed by the president and will be able to legally punish those who post such content.

Sri Lanka’s parliament building. Photo: Tharaka Basnayaka/NurPhoto/AP

The legislation generated immediate backlash. Critics argued that the bill was aimed at stifling political opposition during an election year as the country continues to recover from its worst-ever economic crisis. The Asia Internet Coalition, a trade association which includes Apple, Amazon, and Google, said the law could undermine economic growth and slow foreign direct investment, AP reports. US Ambassador to Sri Lanka Julie Chung also criticized the measure on X.

Afghanistan and Pakistan resume trading

Afghanistan-Pakistan trade resumed on Tuesday as the two countries opened a border crossing that had been closed for 10 days.

For years, truckers transporting goods between the two countries have been able to pass through the Torkham border crossing separating the two countries, AP reports. But amid worsening relations underscored by Pakistan’s recent deportation order targeting almost two million Afghan migrants, Pakistan has imposed visa restrictions on Afghan truckers.

Trucks near the Torkham Pakistan-Afghanistan border. Photo: Ebrahim Noroozi/AP 

Last week, Pakistan began requiring visas for these drivers and closed the border. After several rounds of negotiations with Afghan officials, Pakistan pushed the visa deadline to the end of March.

Trade between the two countries is small, measuring around $1.4 billion annually. However, Afghanistan exports more goods to Pakistan than to any other country, making their bilateral trade critical to Kabul. The Afghan economy has languished under international sanctions since the Taliban seized power in 2021, with Pakistan representing one of the few nations willing to trade with Afghanistan.

Did someone forward this to you? Subscribe at

Middle East

Iran and Turkey hold multiple rounds of talks on avoiding escalation of tensions

Iran and Turkey this week held several rounds of high-level meetings with the intention of avoiding an inadvertent escalation between the two amidst a deteriorating security situation in the region. On Monday, ahead of a UN Security Council meeting on the Middle East, Russian foreign minister Sergei Lavrov held bilateral meetings with his Iranian, Turkish, and Lebanese counterparts on the “sharply degraded” and “tense situation.”

Sergei Lavrov at a meeting of the UN Security Council on the crisis in Ukraine. Photo: Brendan McDermid/Reuters

Lavrov said he discussed with his Lebanese counterpart the need for an immediate ceasefire in Gaza, and claimed that Russia will soon propose “collective efforts” at solving the crisis. Following the UNSC meeting, Iranian President Ebrahim Raisi and Turkey’s President Recep Tayyip Erdogan held bilateral talks in Istanbul, where the two reportedly agreed on the “importance of refraining from steps that will further threaten the security and stability of [the] region,” and to continue coordination on “cross border threats” from militant groups.

Jordan to partner with Egypt and UAE on high-tech infrastructure improvements

Telecommunication companies in Jordan and Egypt this week signed an agreement to establish a subsea optic fiber connection under the Gulf of Aqaba, allowing for faster data and communications transmission between the two. Egypt’s IT minister said the project will boost its digital infrastructure and strengthen its position as a “regional data corridor.”

The project, dubbed “Coral Bridge” after the Gulf of Awaba’s famous coral reefs, is intended to create a regional digital hub, serving data and communication centers in a location chosen for its easy access to Europe, Asia, and Africa. 

Jordan’s Aqaba port. Photo via X

Jordan also signed an agreement with the UAE’s AD Ports Group on developing a “port community system” at the Port of Aqaba. A port community system, or PCS, is a digital platform that consolidates and harmonizes the many different operational and administrative elements of running a port—essentially a digital cloud solution for making Jordan’s key strategic port more efficient. 

Jordan’s economy is also getting a boost from tourism, which generated a 27.4% increase in income in 2023, to reach a total of $7.4 billion. Jordan saw 6.35 million visitors in 2023, a huge increase from just 2.35 million visitors in 2021. However, given the ongoing Israel-Gaza war, Jordan’s tourism industry is bracing for uncertainty heading into 2024.

Iran manufacturing slumps amid weak domestic demand

Iran is suffering a steep manufacturing slump and weakening domestic demand, Iran International reports, citing Iran’s leading domestic economic newspaper“Economic World.” The report cites weak export numbers, a declining PMI, a six-month slide in the “Customer Sales Index” and data that shows Iran’s non-oil economy shrank 0.4% last year.

Economic World cites stubbornly high inflation and poor foreign exchange management by the government, which have apparently contributed to lower purchasing power and consequently weaker consumer demand. Data published in early January by the Iran Chamber of Commerce show notable declines in new orders, exports of goods and services (the lowest reading in 29 months), and raw material inventory. 


EU considers extreme measures to force Hungary on Ukraine aid

The EU is considering suspending Hungary’s voting rights if PM Viktor Orbán blocks aid to Ukraine again. Orbán vetoed Ukraine aid in December to get EU funds to Hungary unfrozen over rule-of-law violations. 

With Ukraine entering a third year of war, EU leaders urgently want to send a united message against Russia, but Orbán’s tactical vetoes have long undermined that.

Five European officials and diplomats said other countries in the bloc are ready to push to make a move against Budapest. Photo: Miguel Medina/AFP via Getty Images

Growing Ukraine fatigue and anti-immigrant rhetoric that is shifting EU rightwards are also expanding Orbán’s influence, and his Fidesz party expects gains in June’s European Parliament elections. For now, the EU is focused on securing unanimous support for Ukraine funding, but the threat to suspend voting rights suggest its tactics will soon change.

Ukraine plans four new nuclear reactors in 2024

Ukraine plans to start construction on four new nuclear reactors this summer to offset lost energy capacity from Russia’s seizure of the Zaporizhzhia plant. With over 55% of Ukraine’s electricity derived from nuclear power, more capacity is urgently needed. Talks are already underway to import two Russian-made reactor vessels from Bulgaria to complete partially built units within two to three years, and legislation enabling the ambitious four-unit expansion is awaiting parliamentary approval.

A Russian service member near the Zaporizhzhia Nuclear Power Plant in Russian-controlled Ukraine in June 2023. Photo: Alexander Ermochenko/Reuters

Rapidly launching multiple new reactors is a testament to Ukraine’s commitment to pushing economic development goals forward despite the challenges posed by the war. Nuclear power provides energy security and reduces Ukraine’s reliance on imported fossil fuels from Russia. 

Latin America

Ecuador seeks debt restructuring amid security crisis 

Ecuador’s President Daniel Noboa is urgently seeking financial support from the US and Europe as he wages an escalating war on drug cartels without the fiscal space needed to fund it. Noboa has declared a state of emergency and launched military offensives, but resources are limited by debt obligations and a continued ability to borrow from international markets, Reuters reports. 

Top officials in the Biden administration visited Ecuador this week to discuss increased security cooperation but Noboa says refinancing Ecuador’s debt is critical to avoid a financial crisis.

With the economy struggling, Noboa is looking for ways to boost state revenue, including increasing oil production. Economy minister Juan Carlos Vega this week asked US entities for financing for social projects and economic growth. Noboa also announced $1 billion in government spending cuts, and he supports a tax on private banks’ pandemic profits.

Chile steps towards landmark reform without radical changes to free market pension system

The lower house of Chile’s Congress has provisionally approved a reform of the country’s private pension system proposed by President Gabriel Boric, the FT reports. Lawmakers voted 84-64 to advance the bill, which aims to redesign the pension system by adding a redistribution component while maintaining individual accounts, but rejected several government proposals in article-by-article voting, leaving key details up to the Senate.

Chile’s President Gabriel Boric. Photo: Reuters

Pension reform has dominated Chile’s agenda for over a decade due to the meager incomes generated for workers and retirees under the current system, where 72% of pensioners receive less than the minimum wage. Previous reform efforts by Boric’s predecessors failed amid clashes between left and right-wing leaders over how to improve benefits while protecting the system. 

Final Senate approval of Boric’s bill would significantly boost Chile’s national saving and retirement incomes through a combination of individual accounts and redistribution.

Cuba adopts austerity measures to support flagging economy

The Cuban government has implemented harsh austerity measures, including a 500% fuel price hike, 25% higher electricity rates and increased costs for propane gas and other staples, El Pais reports. While potentially helping stabilize the economy, the measures will worsen living standards, hitting households already suffering from rationing and meager incomes.

Despite the push for greater stability, contradictory policies such as opening foreign shops while maintaining state monopolies in key industries tend to restrict rather than encourage economic growth. There are also no impactful measures to bolster agriculture and manufacturing, and taxes and price controls continue to limit private sector potential. 

Cuban Citizens have already protested against shortages, inflation and lack of freedom amid the crisis. Further austerity risks social unrest without improving productivity or competitiveness.


Frontier market regional performance diverges

Frontier credit markets’ ratings and economic performance are continuing to substantially diverge across regions, Fitch ratings said in a note. Most Latin American and European FMs saw strong macroeconomic improvements, with multiple upgrades and positive outlooks. 

Frontier Europe saw no downgrades in 2023, as the war in Ukraine boosted economies in the Caucasus and Central Asia. However, frontier markets in the Middle East and Africa faced challenges, with multiple downgrades, defaults, and negative outlooks amid precarious debt sustainability.

Asian FMs were mixed, as some benefited from China’s reopening while others struggled with tightening global financing. Pakistan was downgraded then upgraded on IMF deal progress, while Sri Lanka saw a local currency rating increase after its domestic debt restructuring. But external financing constraints persist for Asian FMs with thin reserves. 

What we’re reading

Mali junta ends 2015 peace deal with separatist rebels (Reuters

Tinubu to intervene in oil and gas investments in Nigeria (Offshore Technology

Nigeria braces for jumbo rate hike (Bloomberg

Nigeria destroyed almost 6,000 illegal refineries since 2021, says NNPC (Offshore Technology

Why Nigeria’s central bank joined Africa’s slow march toward crypto regulation (Semafor

Côte d’Ivoire seeks to strengthen economic ties with China (The Africa Report

Spread of militants and coups draws US attention to West Africa (WSJ

Chad’s president in Russia for talks with Putin (Moscow Times

Cameroon starts world’s first malaria vaccine program for children (Time

Kenya courts quash housing tax and Haiti deployment in blow to Ruto (Bloomberg

Uganda in talks with UAE investment firm over planned oil refinery (Reuters

Ethiopian directive kickstarts financing for gold project (The Africa Report

Iranian drones become latest proxy tool in Sudan’s civil war (Bloomberg

Zimbabwe: Raw lithium ban fails to curb smuggling (The Africa Report

‘Guinea pig’ Zambia warns of disaster if debt relief fails (Bloomberg

Oil declines as Libya’s top field restart eclipses Red Sea risks (Energy Connects

Oil demand in Asia and Africa boosted by cheap Russian crude (Reuters

Indonesian election highlights young voters’ employment concerns (Nikkei

Indonesia election race heats up over Jokowi’s nickel strategy (Nikkei

Myanmar military losing grip near Chinese border (FT

Solomons shows it’s not always easy for China and US to woo small nations (Nikkei

Uzbek president seeks investment from China (Radio Free Europe

World Bank eyes Central Asia to expand renewable energy projects (Nikkei

UAE’s sovereign wealth fund aims to double exposure to Asia (Bloomberg)

China’s imports from Iran grow 24%over 11-Month Period (Tasnim News Agency)

US secretly alerted Iran ahead of Islamic State terrorist attack (WSJ

Iran’s leading moderate banned from body that picks supreme leader (FT

US and Iraq will begin talks soon on ending the mission of the US-led military coalition in Iraq (AP

Iraq: Unlawful mass executions resume (Human Rights Watch)

Over 50 deals worth $26.6b sealed during Saudi Real Estate Future Forum (Arab News)

Why the Arab world is backing Yemen rebels (FT

Hungary’s diplomatic isolation looks complete as Turkey blindsides it (BalkanInsight

Poland secures EU concession to limit food exports from Ukraine (FT

Russia’s fossil fuel revenues continue to fall (

Separatist Transnistria regime aims to boost army amid Moldova tensions (BalkanInsight

Argentina’s Milei waters down reforms in search of consensus in Congress (El Pais

Milei suspends plan to privatize Argentina state oil company YPF (Bloomberg

NASA acknowledges Uruguay’s striking advancements in wind energy integration (MercoPress

Venezuela opposition presidential candidate announces alliance, seeks election date (Reuters)

Welcome to Frontier Markets News

Sign up to receive our frontier and emerging markets newsletter.

We don’t spam and we won't share your info!

Leave a Reply

Your email address will not be published. Required fields are marked *