| Welcome to Next Africa, a twice-weekly newsletter on where the continent stands now — and where it’s headed. Sign up here to have it delivered to your email. South Africa’s fractious ruling coalition is hanging on. For months, the Democratic Alliance has accused the African National Congress of riding roughshod over its smaller partners in a government patched together after last year’s elections failed to produce an outright winner. At issue have been contentious education, health-insurance and land-expropriation laws and a proposal to raise consumption taxes. In an interview on Friday, DA leader John Steenhuisen told us the ruling alliance should survive — or, at least, his party had no intention of leaving. “If the ANC want us out they must kick us out, and they must then deal with the consequences,” he said.  South African President Cyril Ramaphosa ahead of his state-of-the-nation address in Cape Town on Feb. 6. Photographer: Dwayne Senior/Bloomberg Tensions between the two main groupings escalated over the past three months after the finance minister unilaterally tried to hike value-added tax. Enoch Godongwana’s later proposal for a smaller increase was also rejected by the DA, prompting the party to refuse to support the budget and to challenge the legislation that underpins it in court. After initially insisting there was no alternative to higher levies, Godongwana backed down again this week. He now intends cutting spending to deal with a 75-billion-rand ($4 billion) hole in the state’s finances over the next three years, and wants to reach a settlement in the lawsuit.  WATCH: Jennifer Zabasajja speaks with Steenhuisen about the future of the governing coalition on Bloomberg TV. That was a major win for the smaller DA, and the bloody nose it inflicted has no doubt angered members of the ANC. It’s also another reality check for a party that has done pretty much as it pleased when it governed on its own in the three decades after apartheid ended. Steenhuisen still sees the coalition as the best option for the country because, he says, it ensures political stability. Even if that’s the consensus within the ANC, ministers may sit uneasily together in the cabinet after a bruising budget tussle. — Mike Cohen and S’thembile Cele Key stories and opinion:
South Africa’s Second-Biggest Party Rules Out Quitting Coalition
Ruling Coalition Intact as South African Treasury Drops Tax Hike
South Africa Ditches Tax Hike That Tested Ruling Coalition
South Africa’s Godongwana Says He Won’t Resign Over VAT U-Turn
Budget Fiasco Is a Lesson for South Africa’s ANC: Justice Malala An Ivory Coast court’s decision to remove Tidjane Thiam from the voters’ roll effectively disqualified the former Credit Suisse CEO from this year’s presidential election. It also raises the risk of political instability in the world’s biggest cocoa-producing nation. The tribunal found Thiam ineligible because of his dual French-Ivorian nationality at the time he registered. His party plans to start street protests next month.  Opposition leader Thiam during a political rally in December. Photographer: Sia Kambou/AFP/Getty Images A flurry of meetings between dealmakers and officials from Saudi Arabia and South Africa over the past year has culminated in business worth billions of dollars, and more corporate action is in the pipeline. The push is part of a broader Gulf drive into Africa, with the United Arab Emirates and Riyadh in particular investing in mining, renewable energy and agriculture — about $5 billion in deals and investment, some signed and some still in discussions. An injectable drug has been shown to prevent HIV with just two doses a year and could be a gamechanger in the fight against infection. Lenacapavir, which was tested on South African women in trials, is the most promising HIV-prevention tool in a generation. But now it’s unclear who will pay for widespread deployment of the shots, developed by Gilead Sciences, and how many people they will reach in the countries that need them most following US President Donald Trump’s cuts to foreign aid.  An HIV/AIDS ribbon. Photographer: iStockphoto African economic growth will be slower than forecast due to Trump’s trade war and his freeze on US aid, the International Monetary Fund said, as it pledged to support countries in need. Access to loans at low interest rates will be even more important going forward, as risk aversion among investors wary of the trade war push up the cost of borrowing across emerging markets. Jennifer Zabasajja is joined by Matthew Hill to discuss what was on the negotiating table at the IMF/World Bank meetings in Washington for this week’s Next Africa podcast. Money managers are ramping up investment in Nollywood after streaming platforms Netflix and Amazon Prime stopped commissioning original movies in Nigeria. While these companies will continue buying movies from Africa’s most-populous nation, filmmakers will only get paid at the end of production under the new model — creating a financial gap that asset management firms are eager to fill. And the more streamers offer to pay, the higher returns can be if costs stay low.  Nigeria has one of the most-prolific movie industries in the world. Photographer: Cristina Aldehuela/AFP/Getty Images Zimbabwe has asked some of the world’s richest nations for bridge finance to end a debt standoff dating back to 1999, sources say. Finance Minister Mthuli Ncube wrote to 10 nations asking for loans that would then be used to pay money owed to multilateral creditors including the World Bank (that are prohibited from offering new arrangements until arrears are cleared). Zimbabwe’s Treasury said this week it’s nearing a deal with the IMF for a staff-monitored program, which is key to reorganizing its $21 billion debt pile. Next Africa Quiz — The leader of which country cut short a trip to Africa this week after a missile attack back home? Send your answers to gbell16@bloomberg.net. Data Watch - Zambia’s annual inflation rate flatlined at 16.5% in April, providing room for the central bank to pause interest-rate hikes next month.
- The European Union wants to double trade with Kenya after signing an economic partnership agreement granting the African nation duty-free and quota-free access to the bloc. Separately, the government is considering adding gold to its reserves, central bank Governor Kamau Thugge said in an interview.
- Nigeria plans to offer tax incentives to firms investing in key sectors of the economy, such as agriculture and energy.
- Kenya’s economy is set to surpass Ethiopia’s to become East Africa’s largest this year, the IMF said, after the birr was devalued. The switch is expected to be short-lived, though.
Coming Up - April 29 Morocco money-supply data for March
- April 30 April inflation data for Kenya and Uganda, South Africa monthly budget, trade & money-supply data for March, Angola reserves for April
- May 2 Nigeria PMI, South Africa manufacturing PMI & new-vehicle sales for April
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