Frontier Markets Weekly, December 24th 2022

Meet us in NYC | Countries ban mineral exports | Fallout from Ukraine attack spreads | Cocaine seizures hit new high

 By Ken Stibler, Noah Berman and Dan Keeler 

Heads-up, New Yorkers! On January 17th we will be holding 2023’s first frontier and growth markets networking evening at New York City’s coolest new restaurant: The Mermaid Oyster Bar, Times Square. If you’d like to come along, let me know ASAP. Capacity is limited, so don’t dither!

If you’d like to receive this newsletter in your inbox every weekend, sign up at Please also share this link with any friends or colleagues you think would enjoy it.


Ghana defaults on debts. Ghana suspended payments on its external debt on Monday, deepening the country’s financial turmoil and complicating its path toward a rescue from the International Monetary Fund (IMF). After the announcement, S&P Global Ratings downgraded Ghana’s sovereign rating to “selective default.” 

Ghana’s finance ministry said the suspension will apply to Eurobonds, commercial loans, and most bilateral loans.

Ghana’s President Nana Akufo-Addo with Chinese President Xi Jinping in 2018. Photo: Andy Wong/Getty Images

Public debt reached over $55 billion in September, with 70% to 100% of government revenue, according to Reuters. China, a creditor notorious for its reluctance to take haircuts, owns $3.5 billion of the country’s debt, and other creditors may be unlikely to settle for less than what China receives, Axios reports.

Zimbabwe bans lithium exports. Zimbabwe banned raw lithium exports with immediate effect on Tuesday, a move that Harare hopes will keep billions in revenue from leaving the country. If it fully exploits its resources, the country expects eventually to be able to supply 20% of the world’s raw lithium, and 10% within the next four years, Voice of America reports.


Zimbabwe is currently a top-10 lithium producer but it produces only a small fraction of the world’s lithium supply, which is dominated by AustraliaChile, and China. However, mining accounts for an outsized proportion of Zimbabwe’s total exports, and 16% of the country’s GDP.

Lithium is a critical ingredient in electric-vehicle batteries, and demand for the raw material has risen as high-income countries speed toward a new wave of automobile production; prices of the commodity are nearly six times greater than in 2019, according to Trading Economics.

Five arrested after alleged Gambia coup. Gambian authorities arrested five soldiersthey accused of planning to overthrow the government, Premium Times reports. Two additional accomplices remain on the run, the BBC adds.

Gambia was ruled by dictator Yahya Jammeh for more than 20 years until he lost a 2016 democratic election to now-President Adama Barrow and was forced into exile in Equatorial Guinea. The government previously arrested eight ex-soldiers linked to Jammeh for a coup attempt in 2017. Barrow won a second five-year term in elections in 2021.

Gambia’s president Adama Barrow gives a victory speech in Banjul, Gambia December 5, 2021. Photo: Zohra Bensemra/Reuters

Gambia has been widely seen as politically stable since it embraced democracy in 2016, though Africa has been rocked by coups of late. Thirteen of the 14 coups recorded globally in the past five years have been on the continent, most in the turbulent Sahel region.

Sisi’s dream for Egypt comes at a price. Egypt is spending billions on a new capitalthat Egyptians may not visit, Chao Deng and Amira El-Fekki write in the Wall Street Journal. In a desert plain 40 miles east of central Cairo, a sprawling new capital city is taking shape, with skyscrapers, luxury residences and pedestrian malls representing President Abdel Fattah Al Sisi‘s vision of a modern Egypt, fueled by billions of dollars in debt.

Sisi is aiming to attract more than six million people to the 270-square-mile area meant to be the new capital. While it is years from completion, with transportation lines still unfinished and a dusty business tower rising from the middle of a construction site, the government plans to start moving 40,000 civil servants into a completed government district in January.

The Egyptian government’s current base is in densely populated central Cairo. Photo: Khaled Desouki/AFP/Getty Images

The new city is the centerpiece of Sisi’s plan, alongside infrastructure projects such as the expansion of the Suez Canal, a nationwide network of new highways, bridges and tunnels and a resort town along the Mediterranean coast. He’s pursuing these projects, estimated to cost hundreds of billions of dollars, even as the country faces more than one trillion dollars in domestic and foreign debt payments in the coming years, according to UK research firm Oxford Economics.


Indonesia bans more mineral exports. Indonesian President Joko Widodo confirmed on Wednesday that his country would ban exports of bauxite, a key ingredient in aluminum production. The ban is scheduled to take effect in June next year.

Widodo wants foreign companies to invest in bauxite processing facilities in Indonesia, The Diplomat reports. While the government expects bauxite revenue to drop for a few years after the ban takes effect, it forecasts revenue to ultimately triple to $3.9 billion. News of the ban is not expected to significantly affect prices of the commodity, Reuters reports.

Indonesian President Joko Widodo. Photo: Facebook/President Joko Widodo

Under Widodo, Indonesia has become more protectionist. Earlier this year, the country temporarily banned exports of palm oil in an effort to keep domestic prices down after the Russian invasion of Ukraine rattled markets for food staples. And in 2020, Jakarta reversed course on nickel ore, banning exports after a period as the world’s largest exporter of the raw material.

Fiji’s election decided. Nearly a week after (relatively few) voters took to the polls in Fiji, Sitiveni Rabuka emerged as Prime Minister, displacing the incumbent, Frank Bainimarama. The election was marked by allegations of technological sabotage, requests for military intervention, and a brief detention of Rabuka by police in the country’s capital, Suva.

After securing a three-party alliance large enough to gain a majority in the country’s parliament, Rabuka will return to prime ministerial office. He previously led the nation after seizing power in a coup in 1987 and stayed in office until he was deposed in 1999.

Sitiveni Rabuka in Suva, the capital of Fiji. Photo: Saeed Khan/AFP

Under Bainimarama, Fiji grew closer to China, which has sought a larger presence in the strategically significant South Pacific. Analysts expect that Rabuka’s Fiji will pivot toward historical allies such as Australia and New Zealand, the New York Times reports.

Middle East

Trouble in key oil exporting allies creates crushing fuel shortage in Syria. Western sanctions against key suppliers and a pullback in credit are putting extreme pressure on Syria’s economy, the FT’s Raya Jalabi reports. The collapse of Lebanon’s banking sector, which traditionally provided letters of credit for the syrian government, and economic troubles in Iran and Russia have undermined Damascus’ access to credit and favorable terms for crude oil imports. The lack of fuel has had substantial knock-on effects, forcing power outages up to 22 hours a day, factories to stop operations and universities to pause classes.

A woman uses a wood-fired heater at her home in Damascus, Syria. Photo: Yamam al Shaar/Reuters

Government officials have blamed higher prices on US sanctions against Syria, Turkey’s recent air strikes on energy infrastructure such as refineries and power plants, and Russia’s invasion of Ukraine. The oil minister, though, pointed to a recent halt of Iranian fuel imports as the core contributor. 

With key economic partners struggling, few sources of hard currency revenue, and entrenched corruption, the government has been forced to cut food and oil subsidies to millions of Syrians. So far, the fuel crisis has resulted in some small protests, but experts see broader political impacts on Bashar al-Assad’s regime.


Oil price cap begins to chip away at Russia’s economic resilience. Russia’s economy had held up reasonably under the weight of previous Western sanctions, but the oil-price cap that came into effect earlier this month appears to be having an impact, reports the WSJ’s Chelsey Dulaney.

The Russian ruble has become one of the world’s worst-performing currencies after falling 9.4% this week and 14% so far in December. The fall marks a dramatic reversal from Russia’s summer success, where its technocrats at the finance ministry and central bank—with assistance from continued European hydrocarbon imports—helped make the ruble one of the world’s best performers even as countries moved to cut Russia off from the global economy.

Analysts say Russia’s deteriorating trade surplus is driving the ruble’s weakness as the effect of oil price caps is felt as imports from Turkey and China increase. The Institute for International Finance’s Elina Ribakova projects that Russia’s current account surplus will fall to $109 billion in 2023 from $226 billion this year through November.

Latin America

Peace in Colombia creates a cocaine boom. Colombia is experiencing the biggest cocaine boom in its history as changing political dynamics and rising demand from other emerging economies propels the illicit industry, Bloomberg’s Matthew Bristol reports. Colombian cocaine production began rising sharply 10 years ago, around the time the government began peace talks with the FARC guerilla group. As the peace deal came into force, the government stopped forced eradication and shifted its focus from coca production to shipment and money laundering.

A coca paste laboratory in Putumayo province, Colombia. Photo: Esteban Vanegas/Bloomberg

Since 2010, the amount of land planted with coca has risen 182% in Colombia, driving the bulk of the over 2,000 tonnes of cocaine per year according to UN and US data. The efficiency of production and increased land available means output has increased five-fold since the time of Pablo Escobar.

The flood of cocaine is changing consumption patterns. Brazil and Argentina, where cocaine had been relatively rare, are increasingly important markets. Meanwhile, European, African and Asian seizures have increased five, 10 and 15 times, respectively, over the past five years. As traffickers try new routes, places such as Turkey and Eastern Europe are becoming hotspots, joining major transshipment points such as West Africa.

US seeks to solidify Ecuador ties as China woos Quito. Ecuador’s President Guillermo Lasso visited the White House this week in the hope of expanding diplomatic and trade ties, Al Jazeera reports. Before Lasso’s arrival, the US congress passed a partnership act that seeks to expand bilateral cooperation on the economy, security and environmental conservation. While the bill includes deliverables such as assisting with protection of the Galapagos islands, it falls short of the free-trade deal Lasso sought.

Ecuador’s President Guillermo Lasso in the Oval Office with Joe Biden. Photo: Patrick Semansky/AP

Oil-exporting Ecuador has faced significant economic challenges, and the pro-business Lasso pinned his hopes on new trade deals and negotiated debt forgiveness. Beijing moved quickly to meet this demand, rapidly pursuing a free-trade agreement that could facilitate an estimated $1 billion dollars in additional exports for Ecuador. China has also invested heavily in the country, surpassing the US this year as its top trading partner on non-petroleum goods and offering $1.4 billion in debt write downs.

What we’re reading

US struggles to lure African nations over from China. (Nikkei)

Somali troops returning from once-secret training in Eritrea. (AP)

‘Tired of this war’: Congolese cope with M23 rebel violence. (AP)

Tunisia arrests former PM over jihadist departures. (Al Monitor)

Philippines orders strengthened military presence after ‘Chinese activities’ near islands. (Reuters)

Malaysian PM survives confidence vote, stabilizes government. (The Diplomat)

Myanmar turns to small Russian nuclear reactors for energy solution. (Nikkei)

Gwadar, Pakistan protest leader warns Chinese to leave key Belt and Road port. (Nikkei)

Imran Khan pushes for early elections as Pakistan’s economy stumbles. (FT)

PakistanAfghanistan ties fray as Taliban forces shell civilians. (Nikkei)

Afghanistan’s Taliban ban all education for girls. (WSJ)

Turkey’s embattled strongman eyes charm offensive in Middle East. (Balkaninsight)

‘Baghdad II’ summit in Jordan aims for progress on Iraq and Middle East issues. (France24)

Iran enriching ‘worrying quantities’ of uranium, in further blow for nuclear deal. (UN)

Iranian currency weakens further amid protests and rumor that nuclear deal is dead. (Radio Free Europe)

Iran’s foreign minister holds ‘friendly talks’ with Saudi Arabia. (FT)

Crimea showers Syria with wheat, Ukraine cries foul. (Reuters)

Three Jordanian police officers killed in raid as social unrest continues. (FT)

Putin’s Belarus visit stokes fears it could be drawn into war on Ukraine. (WSJ)

Bucharest stock exchange sees highest monthly growth in 20 months. (Romania Insider)

Endgame nears for Kosovo’s crypto haven. (Balkaninsight)

Support for TurkeyChina rises in EU-facing North Macedonia. (Balkaninsight)

IMF approves Ukraine program to help attract further funding. (Radio Free Europe)

Guatemala plans March summit for ‘Taiwan-friendly’ countries. (Reuters)

Venezuela’s opposition majority calls for the termination of Juan Guaidó’s ‘interim government.’ (Mercopress)

US Congress passes Bolivar Act banning deals with Venezuela’s Maduro government. (Mercopress)

As Peru’s unrest chases away visitors, many in tourism fear for their livelihood. (NYT)

Peru Congress opens door to early elections amid unrest. (AP)

Peru’s new president reshuffles cabinet as Mexico ties tested. (Al Jazeera)

Argentina, caught in economic depression, gets something to cheer in World Cup win. (Politico)

Brazil lawmakers approve $28b increase in spending cap for Lula plans. (FT)

Brazil planning to become world’s largest cotton exporter, ahead of US. (Mercopress)

Lula, Putin talk on ‘strategic’ Brazil-Russia relations. (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 *