Frontier Markets Weekly, March 11th 2023

Mauritania green hydrogen | Bangladesh banks in spotlight | Saudi Arabia’s diplomatic whirlwind | Bolivians’ currency panic

By Dan Keeler, Ken Stibler, Noah Berman and Nojan Rostami

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

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.


Egypt eases citizenship laws to spur investment. Egypt, which is grappling with surging inflation and a depreciating currency, relaxed citizenship laws this week for foreigners who invest US dollars in the country. The Egyptian pound lost half its value against the US dollar last year, while inflation rose to 32.9% in February.

Foreigners who buy $300,000 worth of state-owned real estate or who deposit $500,000 in an Egyptian bank account will become eligible for Egyptian citizenship, AfricaNews reports. Previously, foreigners had to buy $500,000 worth of real estate or deposit $750,000 in an Egyptian bank account to acquire citizenship.

Egyptian pounds at a currency exchange shop in downtown Cairo. Photo: AFP 

Citizenship by investment became legal in Egypt in 2019. The decision to reduce the prerequisites to earn citizenship comes as the country aims to bolster its floundering economy with foreign investment.

The UAE, Egypt and Germany collaborate on Mauritania green hydrogen project.A consortium composed of German project developer Conjuncta, Emirati clean energy investor Masdar, and Egyptian energy provider Infinity signed a $34 billion MoU for the construction of a green hydrogen production plant in Mauritania, Reuters reports. 

The announcement follows last week’s large commitments by the UAE’s sovereign wealth fund to invest in Africa, as the country tries to diversify away from a dependency on oil and gas exports. The project will have a capacity of 8 million tonnes of hydrogen products with a planned capacity of 400 megawatts, and is due to be completed in 2028.

UK plans tighter business ties with Africa. UK Prime Minister Rishi Sunak is planning to bring together dozens of African leaders for a summit in April 2024 as part of its strategy to strengthen its business footprint on the continent. The gathering will include the leaders of the fifteen biggest economies in Africa.

The UK is the largest holder of foreign assets on the continent, according to the United Nations Conference on Trade and Development. The first edition of the summit, in 2020, saw the announcement of deals worth £6.5 billion ($7.7 billion) and an additional £8.9 billion of investment.

Workers in Mozambique use a hydraulic wrench to build a new railway track. Photo: Ivanbrunom/Shutterstock

London has at times sought to tie investment to human rights or other social policy goals. This week, the UK signed a trade and investment deal with Sierra Leone that sets standards for gender equality. 

Dispute over Nigerian election continues. The two losing candidates in Nigeria’s presidential election continue to allege manipulation of election results in favor of the winner, Bola Tinubu. The losing candidates, Atiku Abubakar and Peter Obi, have each sworn they will challenge the result of the election.

Amid the rancor over the presidential election, the Nigerian electoral commission postponed state elections that had been planned for this Saturday.

A man walks past a campaign banner in Lagos. Photo: Pius Utomi Ekpei/AFP/Getty Images

On Monday, Abubakar led a march to the headquarters of Nigeria’s electoral commission in Abuja, the country’s capital. Meanwhile, Obi canceled planned campaign visits for candidates from his party on Wednesday, writing on Twitter that he remains “committed to and will give more attention to our mission of retrieving our mandate.”

Podcast: Matt Tilleard, Crossboundary

Getting funding to projects in developing countries is one of the thorniest problems in international development. Crossboundary, an innovative firm that started life creating off-grid solar-power projects in East Africa, might just have cracked the code. 

In this week’s podcast, Matt Tilleard, Crossboundary’s co-founder, explains how the firm is channelling the capital looking to do good in the world to where it’s needed most, how they’ve deployed more than $1 billion already, and how the economics of distributed renewable energy are improving exponentially.

Listen in.


How Southeast Asia’s role in global supply chains could grow. Southeast Asia should replace China as a dominant player in global supply chains, the head of the ASEAN Business Advisory Council told Al Jazeera

Arsjad Rajid, the chair of the council, said that Southeast Asia could become the “supply chain of the world” and that it had the capability to surpass China as “good as tomorrow.”

Chinese companies have faced increasing scrutiny from US and Western policymakers amid a growing geopolitical rivalry. Major companies, including Apple, Google and Samsung, have rerouted manufacturing from China to Southeast Asia in recent years. Last year, a survey by the EU Chamber of Commerce reported that 23% of Western firms said they were considering leaving China.

Workers perform quality checks on smartphones at a factory in Hanoi, Vietnam. Photo: Bloomberg

Vietnam has won business from these supply chain shifts, the South China Morning Post reports, especially in manufacturing. Meanwhile, resource-rich countries such as Indonesia and the Philippines hope to leverage abundant nickel resources to bolster their roles in electric vehicle supply chains. Indonesia has the world’s largest nickel reserve, and the Philippines has the fourth-largest.

Sri Lanka says IMF deal is imminent. After receiving debt restructuring assurances from China, Sri Lankan President Ranil Wickremesingh said on Tuesday that a stalled IMF bailout could be unlocked by the end of the month, the Associated Press reports. 

After receiving a letter from the Export-Import Bank of China on Monday, Wickremesingh said he and the governor of Sri Lanka’s central bank immediately approached the IMF seeking the release of $2.9 billion in bailout funds. Sri Lanka reached a preliminary agreement with the international lender last September amid a political and economic crisis that deposed previous president, Gotabaya Rajapaksa.

Sri Lankan port workers protest against an income tax increase in Colombo. Photo: AP via Nikkei

The deal, which was conditional on bilateral restructuring commitments, has since stalled as Sri Lanka attempted to get China on board. China owns between 10% and 15% of Sri Lanka’s $51 billion in foreign debt, according to the Diplomat. Other creditors, including India and Japan, previously gave restructuring commitments. 

Bangladesh downgrade puts banks in spotlight. After a downgrade by credit rating agency Moody’s last week, banks in Bangladesh are on the defensive. Economists warn that the move could raise borrowing costs and make cross-border transactions more difficult, Nikkei reports.

Photo: Getty Images, via the Economist

Banks in Bangladesh have been rocked by allegations of scams and corruption of late, the Daily Star reports. And many of them allegedly function like shell companies to provide the well-connected with an uninterrupted flow of money, The Economist reports.

Bangladesh’s economy has been slowly weakening amid stubborn inflation, causing some analysts to fear that it will suffer the same fate as Sri Lanka, which defaulted on its debt last year. Bangladesh’s foreign reserves have shrunk to $32 billion, according to data from its central bank, from a high of $48 billion in August 2021. Its currency, the taka, has depreciated over 11% against the dollar in the first sixth months of this fiscal year, one of the highest devaluations in the region.

Middle East

Saudi Arabia looks to deepen ties with old allies. Saudi Arabia this week made significant steps to repair broken relationships and reaffirm alliances. In a sign of rapprochement with Turkey, the Saudi Fund for Development (SFD) deposited $5 billion in Turkey’s central bank to shore up the weakened lira, and pledged $800 million in further private loans, the Washington Post reports.

The Saudi foreign minister Prince Faisal bin Farhan also had a meeting with Russianforeign minister Sergey Lavrov in Moscow, after which the two stressed “the importance of deep coordination between the Kingdom and Russia in the energy markets” and reaffirmed their commitment to cooperate on OPEC+ policy.

Saudi Arabian Foreign Minister Prince Faisal bin Farhan Al Saud in Berlin. Photo: Abdulhamid Hoşbaş/Anadolu Agency

Prince Faisal also announced this week that there’s a possible path for Syria to rejoin the Arab League. And Iran and Saudi Arabia agree to resume relations and reopen embassies, Al-Monitor reports.

The flurry of diplomacy comes on the heels of a Wall Street Journal report that Saudi Arabia’s ally the UAE was reconsidering its membership in the OPEC cartel amid a growing rift between the two Arab countries.

Iran seeks to counter effect of sanctions with mining and manufacturing investment. At an economic cooperation meeting with West African representatives, Iran’s Ministry of Industry, Mines and Trade (MIMT) announced industrial manufacturing and mining contracts worth $850 million, state-affiliated Mehr News reports. The announcement comes as Iran is seeking to develop a trade network unaffected by punishing Western sanctions.

Iran’s Minister of Industry, Mine and Trade said Iran and West African countries will sign contracts worth $850 million as well as MoUs valued at $1 billion. Photo: Mehr News Agency

The country’s efforts to shore up and diversify its struggling oil-dependent economy will be boosted by the reported discovery of the world’s second-largest lithium reserves. Iran’s government believes that a deposit located in Hamedan, in the country’s northwest, holds 8.5 million tons of lithium.

However, news that the country supplied Russia with a large shipment of ammunition through Caspian shipping routes could prompt yet more sanctions by the West.


Georgians protest against perceived Russia ties. Georgia’s ruling party scrapped a controversial foreign agent law after protests gripped the post-soviet state, the FT reports. The measure bore similarities to a law Russia used to crack down on independent media and civil society.

Protesters squared off with riot police and were blasted with water cannons | AFP via Getty Images

The dominant Georgia Dream party has increasingly sparked fears of alignment with Moscow’s interests. However, Western criticism and intense clashes between police and pro-democracy protesters forced the government to pull the bill.

Recent polling shows that 85% of Georgians support EU membership.

Ukraine’s economic outlook improves. Despite continued pressure from the cost and risk of the war, Ukraine’s medium-term economic outlook is increasingly positiveaccording to consultancy FrontierView. The group says inflation is already moderating, and interest rates are expected to decline and the currency to weaken by 2025. 

The country’s recovery, while heavily contingent on the outcome of the war, looks likely to benefit from continued US support and eventual reconstruction funding from multilateral institutions, as well as $300 million in seized Russian reserves.

Funds for reconstructing Ukraine could help fuel its economic recovery. Photo: Reuters

While corruption and geopolitical risks are likely to remain, an end to the conflict would see a rush of investment into the country supporting domestic incomes. Additionally, western rule of law conditions and an expected influx of Ukrainians back the country also serve to bolster a future recovery.

Latin America

Bolivian currency shortages cause panic. Rumors of currency shortages and an impending breaking of the dollar peg have triggered panic among Bolivians, Reuters reports. As dollars have become scarce, both in the economy and at the central bank, local bond yields have spiked and the informal cost of dollars climbed quickly.

People stand outside Bolivia’s Central Bank to buy dollars. Photo: Claudia Morales, Reuters

The Andean country’s foreign currency reserves have fallen from around $15 billion in 2014 to $3.8 billion at the end of 2022 as the country has repeatedly been forced to protect its currency peg. Higher import costs, falling gas exports, and elevated state spending have sucked dollars out of the system leading to a rush for dollars. 

Chilean congress shelves wealth tax in blow Boric’s agenda. Chile’s legislature has rejected proposed tax reforms by President Gabriel Boric’s administration that would have included a wealth tax to fund social spending initiatives that form the core of the young left-wing leader’s ambitious agenda.

Chile’s President Gabriel Boric. Rodrigo Garrido/Reuters

Observers were surprised by the lower house’s rejection of the bill, which was widely expected to pass. While the administration can re-present the bill to the upper house, albeit with a higher vote threshold, the rejection marks a serious setback to Boric who had built his agenda on financial and political flexibility generated by constitutional and tax reforms.

In the wake of the defeat, Boric made substantial changes to his cabinet, Reuters reports. 

Gas loan offers hope for Argentina’s battered economy. Argentina secured nearly $900 million from the Development Bank of Latin America (CAF) to construct a long-anticipated natural gas pipeline. The “President Néstor Kirchner” pipeline will bring gas from the large Vaca Muerta deposit in the south of the country to the more industrialized north.

After the announcement, “supereconomy” minister Sergio Massa made it clear that Buenos Aires intends to become an exporter and benefit from growing demand across a Southern Cone region that is facing gas shortages.

Argentina’s ‘President Néstor Kirchner’ gas pipeline. Photo via MercoPress.

While the project faces the traditional challenges of operating in Argentina’s uncertain macroeconomic environment, its completion would reduce the country’s currency woes and boost local industry. Reducing energy imports from Bolivia would keep scarce hard currency in the country and offer a badly needed tailwind for the battered peso.

What we’re reading

Ghana’s economic woes deepen over debt swap debacle. (The Africa Report)

Re-election of Nigeria’s APC will mean broad policy continuity. (FrontierView)

DRC president tells Macron conflict in east may delay election. (Bloomberg)

Sub-Saharan African countries repatriating citizens from Tunisia after ‘shocking’ statements from country’s president. (CNN World)

South Africa GDP shrinks 1.3% as power cuts strangle economy. (FT)

Pakistan’s dystopian warning to the world. (Bloomberg)

Pakistan in ‘perfect storm’ of crises. (AP)  

Nepal says tourists trekking in Himalayas must hire local guides. (Al Jazeera)

Philippines and Vietnam to import LNG, but long-term doubts loom. (Nikkei)

Indonesia eyes extending export bans to bauxite, copper and beyond. (Nikkei)

Malaysia’s government eyes high spending in its recent populist budget. (FrontierView)

Jordan’s king directs government to commit to timetables for implementing economic vision. (Jordan Times)

Oman’s OQ gets $2 billion in orders for $244 million Abraj IPO. (Bloomberg)

Iran opens trade center and permanent exhibition in Afghanistan. (Tehran Times)

Iran makes first arrests over suspected schoolgirl poisonings. (The Guardian)

US sanctions Iran drone suppliers in China. (WSJ

Russian crude oil heads to UAE as sanctions divert flows. (Reuters)

Citi warns clients about risks of Russia ‘weaponizing’ metals. (FT)

West tightens sanctions compliance as Russia’s economy avoids worst-case scenario. (Radio Free Europe)

China and Russia ‘cooperating on propaganda more than ever.’ (Radio Free Europe)

Montenegro ‘illegally ordered expulsion of Turkish citizen.’ (Balkaninsight)

Costa Rica ponders ways to sustain reforestation success without fuel taxes. (AP)

Cuba’s president meets CEO of Russia’s Rosneft amid fuel shortage. (Reuters)

Bukele looks to eliminate four-fifths of El Salvador municipalities. (El Faro)

A generation of Venezuelan children know only struggles. (AP)

Venezuela to consider crude production bump with Russia’s Rosneft, minister says. (Reuters)

Ecuador judge OKs bribery charges against ex-president over Chinese dam contract. (Reuters)

Peru’s copper starts to flow to ports as protests ease, minister says. (Reuters)

Massa announces “wine dollar” for Argentine producers. (Mercopress)

Climate change could cost Latin America 16% of GDP this century, says Moody’s. (Reuters)

China’s power in emerging markets creates headache for global investors. (WSJ)

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 *