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

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

Africa

Nigeria aims to plug housing gap 

Nigeria is planning to create a 1 trillion naira ($654 million) fund to provide low-interest mortgages and fill a 28 million-home gap, Bloomberg reports. For its first phase of funding, the government took out a 40-year loan from the World Bank’s International Development Association at a 1% interest rate. 

The government hopes additional private sector funding from pension funds and banks will boost the first phase to a total 250 billion naira. 

The mortgages in the new plan will be available in the coming weeks and will be of “single-digit or low double-digit interest rates” for around 25 years. The country’s finance minister, Wale Edun, says he hopes this will spur a construction boom for Africa’s most populous country.

A proposal to establish a ‘citizenship by investment’ program could also boost investment into Nigerian real estate by attracting more foreign investors. Specific details of the bill, sponsored by the Deputy Speaker Benjamin Kalu and other lawmakers, are still unavailable, but it is expected to focus on critical economic sectors such as petroleum, manufacturing, real estate and technology.

Gold sales ‘prolonging Sudan’s civil war’ 

Sudan’s gold industry has been a key factor in prolonging the civil war, providing resources for both government forces and the rebel Rapid Support Forces, AFP reports. Although the conflict—which will mark its second anniversary on April 15—has severely damaged Sudan’s society and economy, the government says gold production hit record levels in 2024.

Central bank numbers show that legal exports brought in $1.57 billion. However, research by NGO Swissaid found around half of all Sudan’s gold is being smuggled to Chad, South Sudan, and Egypt before making its way to the UAE.

The UAE has denied profiting off illicit Sudanese gold trading, but according to Sudanese officials, mining industry sources and Swissaid’s research, nearly all of Sudan’s gold is flowing into the UAE via official trade routes, smuggling, and direct Emirati ownership in the government’s currently most lucrative mine.

Zambia inflation eases

For the first time in more than a year, Zambia recorded a drop in inflation this month, Business Insider reports. Last year, the southern African country went through a severe drought—its worst in almost a century—that led food prices to surge as crops dried up. Zambia’s hydropower-dependent grid also faced chronic blackouts.

The drought drained Zambia’s financial reserves, prompting it to take on more debt. But after an increase in rainfall in recent weeks, food costs for essential items such as bread and cereal fell, with food price inflation dipping from 20.6% last month to 18.9% this month. 

• Bitcoin firms use Zambian hydropower to mine coins—and reduce power costs for locals (BBC)

Zambian authorities are also working to tackle a 3% decline in the currency, which has caused non-food inflation to rise from 11.7% to 13.2%. The country’s government hopes the mining sector can help offset the decline and this week announced that new mines are expected to begin operating shortly and miners will soon get investments to boost output.

Asia

Bangladesh leader seeks investment on China visit

Bangladesh’s interim leader Muhammad Yunus visited China this week for his first international trip since taking over as interim leader last August.

During his visit, China’s leader Xi Jinping said China would consider loweringinterest rates on loans to the South Asian nation, Nikkei reports. Before meeting Xi, Yunus asked China to also eliminate commitment fees on China-funded construction projects, Business Standard reports 

As Yunus embraces a bigger role than many expected from the self-proclaimed caretaker, he’s prompting supporters and allies to consider intensifying their efforts to wrestle political power from the established elites, NPR reports. Over the past half year he has also come under fire for imprisoning journalists and other violations of human rights. 

Laos signs $1.5bn clean energy deal with China

Laos has signed a deal with a Chinese company to build out clean energy infrastructure, according to a Monday filing it made with the Shenzhen Stock Exchange. The Chinese firm, China Western Power Industrial, will work on the $1.45 billion project with a Singapore-based construction company to design and build an 1,800-megawatt power plant.

The project is expected to complete the design phase this year and become operational by 2030, Reuters reports.

The investment comes as Laos seeks to attract stronger inflows of foreign funds. According to World Bank statistics, net inflows of FDI to Laos reached a record high of $1.8 billion in 2023, the most recent year from which data is available. Some 96% of FDI goes to mining and agriculture, according to the US State Department’s most recent investment climate statement.

Indonesia’s currency drops to lowest level in almost two decades

Indonesia’s rupiah crashed to near a record low this week, extending a series of losses that has brought it to levels unseen since the Asian financial crisis in the late 1990s. 

• Indonesia picks Ray Dalio as sovereign wealth advisor (FT)

Like many emerging markets, Indonesia has been battered by unrelenting volatility from the global pandemic, wars abroad, and now uncertainty created by US President Donald Trump. Investors are especially concerned about Indonesia, however, because of its government’s high spending and weaker than expected revenues, Reuters reports.

Rumors that the country’s investor-friendly finance minister, Sri Mulyani Indrawati, has been pushed out by President Prabowo Subianto have intensified those concerns. Indonesia’s benchmark index fell 7% last week before Sri Mulyani denied the rumor.

Middle East

Oman looks to increase reliance on hydrocarbons

Oman’s energy and minerals ministry this week launched the bidding process for 11 new onshore and offshore oil concessions, seeking to raise production by 300,000 barrels per day—about a 30% increase—the Times of Oman reports.

The timing of the auction surprised some, coming amid concern that US tariffs, a slowdown in consumption in China, and a recent commitment by OPEC+ to increase production could cut energy prices. It also seems to undermine Oman’s commitment to being a regional leader in funding green energy investments, which has prompted the development of landmark green hydrogen projects and solar power interconnection projects with its neighbors

Bidding closes in June, and the ministry has announced three new incentive initiatives to promote competitive pricing, including reforms to the royalty system, partnership with national-champion OQB, and options for directly integrating the oil produced from the blocks with other refining or manufacturing projects. Some observers have suggested Oman’s effort to increase oil production may be an attempt to address the country’s growing budget deficit.

Lebanon moves to enhance political and financial stability

Lebanon’s new government this week appointed Karim Souaid, an asset manager and former HSBC senior executive, as the new central bank governor, AP reports. Souaid, who gained the backing of more than two-thirds of Lebanon’s cabinet, will have to recapitalize the bank’s balance sheet to support Lebanon’s fragile financial sector, restore its credibility after years of embezzlement and falsified record keeping, and tackle rampant inflation and currency depreciation. 

In an effort to stabilize its finances, Lebanon has engaged the IMF on a new program, which this week confirmed that talks on a new financing program are underway, but are contingent on a “reboot” of economic policies—especially concerning local banks’ restructuring—and compliance by Lebanon’s new government with conditions on fiscal reforms and currency reserve management.

The country’s government is pushing hard to normalize its international relations. President Joseph Aoun this week visited France to discuss potential financial support and management of the ceasefire between Hezbollah and Israel, Reuters reports. French President Emanuel Macron and Aoun are also scheduled to have a call with Syrian transitional leader Ahmed al-Sharaa on Lebanese-Syrian relations, seeking to confirm Syria’s “commitment not to interfere in the affairs of its neighbors.” 

Europe

Armenian parliament votes to join EU

Armenia’s parliament has approved a bill directing the government to pursue EU membership, marking a significant shift away from Russia’s sphere of influence, Radio Free Europe reports. The legislation passed with 64 votes from the ruling Civil Contract party against 7 opposition votes, as Prime Minister Nikol Pashinian’s government continues its Westward pivot following what it perceives as Moscow’s failure to support Armenia during the 2023 Nagorno-Karabakh conflict with Azerbaijan. 

Armenia froze its participation in the Moscow-led Collective Security Treaty Organization in February 2024 while strengthening ties with Western powers through military exercises with the US, defense cooperation with France, and a strategic partnership agreement with Washington. Russian officials have warned Armenia they are considering expelling it from the Eurasian Economic Union, scrapping tariff-free trade, raising natural gas prices and potentially deporting Armenian migrant workers from Russia.

Czech government steps in to save Radio Free Europe

The Czech government pledged to finance Radio Free Europe/Radio Liberty after the Trump administration cut funding to the Prague-based broadcaster as part of broader foreign aid reductions, the FT reports. Prime Minister Petr Fiala has pledged to “do everything we can” to maintain the outlet’s operations, citing its historical importance in countering propaganda from authoritarian regimes.

Foreign minister Jan Lipavský has suggested a European consortium could consider purchasing the media group.  

The broadcaster—and key FMN Europe source—reaches a weekly audience of 47 million across 23 countries. The outlet is challenging funding cuts in US courts while its Russian-language staff—many with residency permits tied to their employment—face uncertain futures as officials in Moscow reportedly celebrate the organization’s potential demise.

Latin America

Argentine imports boom on a stronger peso

Argentina’s imports have surged 30% over the past six months as libertarian President Javier Milei pursues a strategy of maintaining a strong peso and liberalizing the traditionally protectionist economy, the FT reports. Foreign goods—from Italian pasta to Chinese bicycles—are flooding into the country after Milei’s administration eased import restrictions and slashed tariffs. Chinese imports more than doubled in February compared to last year. 

The peso’s substantial rise has increased Argentines’ purchasing power abroad, but has increased the current account deficit and narrowed the country’s trade surplus. The slump in the trade surplus to $224 million in February from over $1 billion monthly through most of 2024 is helping push the country’s already negative central bank reserves further into the red.

• Argentina targets $20 billion IMF deal (Reuters)

Some analysts expect growing oil and gas exports—projected to yield an $8 billion surplus this year—will help offset rising imports and maintain a positive trade balance. In the meantime, Argentine manufacturers, who employ nearly a fifth of the nation’s workforce, have warned they could be forced to lay off workers as the stronger currency is making them less competitive.

US to impose tariffs on countries that purchase Venezuelan oil

US President Donald Trump has announced a sweeping 25% tariff on all imports from countries that purchase Venezuelan oil, a move that could significantly disrupt global crude markets and escalate his administration’s trade conflicts, the FT reports. The tariffs, characterized as “secondary tariffs,” would apply in addition to any existing levies and would remain in effect for one year after a country’s last Venezuelan oil import unless removed earlier by the US commerce secretary.

Major importers of Venezuela’s 660,000 barrels per day of crude exports—including China, India, Spain and Italy—now face a difficult choice between scrapping the oil purchases or facing substantial tariffs on their US-bound exports. Analysts expect most countries will “self-sanction” rather than risk the penalties.

Oil markets reacted immediately with Brent crude rising 1.3% following the announcement. The US itself is one of the biggest buyers of Venezuelan oil.

Global Macro

Investors use EM local currency bonds to diversify away from US risks

Asset managers are increasingly venturing into emerging-market debt, seeking shelter from US-induced volatility through local currency bonds in places such as Jamaica, Pakistan, Kazakhstan, and Uzbekistan, Bloomberg reports. Major firms including William Blair, AXA Investment, Ninety One, PineBridge and BlackRock are making off-benchmark allocations and leaving currency risks unhedged to capture attractive yields from markets that operate largely independently from global economic forces.

The appeal of these frontier investments lies in their combination of undervalued currencies, high interest rates and minimal correlation to mainstream markets—offering potential protection against unpredictable global events like Trump’s tariff policies. Often, they also offer substantial yields—Uzbekistani soum bonds are paying 17%, Jamaican five-year notes 11.875%, and Kazakhstan’s bonds 10.25%—that can potentially offset currency fluctuations while still delivering meaningful returns.

Fund managers emphasize these frontier allocations represent strategic diversification rather than core holdings, requiring disciplined research and clear risk management to navigate the lower liquidity and heightened local risks inherent in these markets. “When you go into frontier markets, you’re not really playing the global dollar weakening theme,” explains AXA Investment’s Magda Branet. “You have to like the currency in order to go into the trade.”

What We’re Reading

Uganda aims to tighten tax regime (Nile Post) 

Metals giants consider using Tanzania port as gateway to Africa (The Citizen)

Somalia offers US ‘control’ over strategic ports (Semafor)

Somalia and Turkey deepen security and economic ties (GoobJoob)

IMF wants clarity on Senegal data before program talks (Bloomberg)

Foreign flower firms flee Ethiopia as Amhara conflict intensifies (Semafor)

Trump fails to fill top Africa job for the third time this term (Semafor)

Bangladesh pushes green energy as summer power shortages loom (Nikkei)

IMF reaches deal with Pakistan to unlock $1.3bn (Dawn)

Top Vietnam conglomerate to invest $30bn in renewables, LNG (Nikkei)

Vietnam approves Starlink (Reuters)

Malaysia expects 4.5% to 5.5% GDP growth in ‘challenging environment’ (Nikkei)

Turkish opposition rallies in defense of jailed Istanbul mayor (The Guardian) 

Iran’s currency drops to new record low (Reuters)

US issues conditions to Syrian transitional government for removal of sanctions regime (Al Jazeera)

Bahrain launches bid for UN Security Council seat (Bahrain News Agency)

Gaza war ‘becomes existential risk’ for Jordan (Foreign Affairs)

Romania’s US visa waiver entry put on hold amid security review (Romania Insider)

VP of Romanian telecom and media regulator ANCOM hits back at Elon Musk (Romania Insider)

Russia increases fuel supply to Bolivia amid rising energy crisis (Reuters)

Poland to pioneer use of EU pandemic funds for defense (FT)

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