African press review 26 June 2012

In Kenya, President Kibaki's rejection of proposed new rules for members of parliament is a big story while South Africa's business paper worries that investors are watching South Africa's politics closely....

The Daily Nation in Kenya reports that President Kibaki has rejected a controversial bill that would have allowed MPs to change parties without losing their seats.

The president refused to sign the Political Parties Act which sought to allow party-hopping, under which those elected on a paricular party ticket could subsequently move to a rival group, or set up their own party, without losing their parliamentary seats.

The President also rejected the bill requiring those seeking election to the Senate and Parliament to have university degrees.

More than 80 sitting MPs would be barred from parliament if the degree requirement became law.

The head of the Catholic Church in Kenya, a Cabinet minister and the Institute of Certified Public Accountants of Kenya had all earlier warned MPs against making laws that would, according to critics of the legislation, divide the country in the approach to elections due later this year.

President Kibaki explained that he could not sign the controversial bills because of pending court cases.

The landslide tragedy in Bududa dominates the Ugandan front pages. The Kampala-based Daily Monitor reports 18 confirmed dead and at least 450 missing.

The paper says that at least 11 villages were buried in the mountainous eastern region of Bududa, reviving memories of the March 2010 and August 2011 landslides in the same area. Government yesterday advised residents living near the affected villages to move to safer ground.

Regional daily The East African reports that companies in Nairobi and Kigali seeking the services of foreign experts will have to dig deeper into their financial reserves after a survey ranked the two cities the most expensive in the region.

The 2012 cost of living survey, carried out by an international human resource consultancy firm shows that Nairobi and Kigali have become less attractive to international workers.

Dar es Salaam and Kampala were ranked third and fourth respectively.

The survey attributed the high cost of living to inflation, driven by weak local currencies.

According to the South African financial daily, BusinessDay, investors will be watching closely for signs that more state intervention in the economy is on the cards, based on the outcome of the policy conference of the African National Congress, which starts today in the Johannesburg suburb of Midrand.

Policies mooted at the event will not be adopted until the ANC’s elective conference at the end of the year, but debate around the more controversial measures could spook financial markets and frighten investors.

Leadership questions will not be dicussed.

Measures to be considered include the imposition of a mineral resources rent tax on an already embattled mining sector, the expropriation of land, and a range of constitutional and judicial changes.

If any of these policies is implemented, says BusinessDay, there would be potential for a backlash on the financial markets and that could also lead to a downgrade of South Africa’s credit standing, pushing up the cost of state borrowing and reducing investor appetite for local assets.

The three top rating agencies - S&P, Moody’s and Fitch - have given South Africa a negative outlook, citing a risk that political pressure could lead to more populist economic policies.

There is, according to BusinessDay, huge pressure on the ANC to come up with new ideas to address chronic poverty, unemployment and inequality, but anything too radical could undermine existing policies seen by investors as a prerequisite for a healthy economy.

The Egyptian Gazette notes that share prices in Cairo yesterday made their largest one-day gain in more than nine years after the Muslim Brotherhood's Mohamed Mursi was named as the country's first freely-elected president.

Monday's rally is also the fourth biggest gain in the index's 14-year history.

Traders, however, were cautious, saying the market euphoria could quickly evaporate if the new president cannot form a government with broad political support.