Canary Compass

20/06/2025

Since 2021, Iran has restricted International Atomic Energy Agency (IAEA) inspector access to key sites, removed surveillance equipment, and enriched uranium to 60%, with isolated particle detections near 84%, according to IAEA reports. While weapons-grade uranium requires enrichment to around 90%, Iran's growing stockpile of 60% material shortens the time required to reach that threshold. Breakout time, the period needed to produce enough weapons-grade uranium for one bomb, shrinks as stockpiles grow. Critically, satellites cannot directly verify enrichment levels. Without inspectors on the ground, we lack certainty about the most sensitive part of the equation. Escalating without that certainty risks grave miscalculation.

Critics dismiss this as "TACO'ing"—Trump Always Chickens Out. However, history is replete with warnings about acting on partial intelligence. In 2003, the U.S. invaded Iraq based on claims of weapons of mass destruction. Those weapons were never found, despite extensive inspections, and the result was decades of destabilisation, human loss, and geopolitical blowback. Restraint in the face of degraded visibility is not fear. It is refusing to gamble with war. Yes, Iran’s opacity is dangerous, but opacity on one side does not justify recklessness on the other. To avoid such recklessness, the path forward lies in restoring clarity through verification.

On June 13, Israel launched a sweeping military strike targeting Iranian nuclear and military sites, including key facilities like Natanz.

04/06/2025

African multilaterals did not arise to replicate Bretton Woods's logic; they emerged because global MDBs failed to meet Africa’s infrastructure, trade finance, and liquidity demands. Subjecting them to restructuring for ‘behaving commercially’ punishes them for adapting to the very constraints global institutions are shielded from. Critics argue that their non-concessional rates and shorter maturities make them resemble commercial lenders, but this misses the point. African multilaterals borrow in high-cost environments and lack access to countercyclical liquidity. They survive not through privilege, but through structural improvisation. To judge them by the standards of institutions born AAA is to institutionalise unfairness and call it reform

In a widely circulated article highlighting tensions in Zambia’s debt restructuring negotiations, African multilateral institutions such as the Trade and Development Bank (TDB) and Afreximbank are reportedly resisting calls to accept losses alongside other creditors.

29/05/2025

The way I see it, the global capital landscape is undergoing a structural shift. Emerging and frontier markets, currently buoyed by tailwinds from a weaker USD, must now think strategically about preserving capital inflows. That begins with macroeconomic stability, credible policy signaling, and fiscal discipline.

For Zambia, rolling over the IMF Extended Credit Facility (ECF) is non-negotiable. It will reinforce investor confidence and signal institutional continuity ahead of a politically sensitive period. The UK’s move to redirect pension capital inward reflects a broader trend where capital is being re-domesticated through regulatory levers. In parallel, proposed changes to the U.S. Supplementary Leverage Ratio (SLR) could further tighten global bank balance sheets and potentially constrain cross-border liquidity.

If these shifts become systemic, external financing for low- and lower-middle-income countries will compress. Only nations with rules-based macro frameworks, programmatic credibility, and institutional resilience will remain investable.

In summary: as global liquidity fragments, credibility becomes the last defensible form of collateral.

16/05/2025

Update (May 16, 2025):

The article has been revised to reflect the current status of U.S. tax legislation impacting the Portfolio Interest Exemption (PIE). While PIE is not explicitly repealed, Section 899 proposes a 5% surtax that may override treaty benefits. This signals a shift in capital taxation with implications for dollarized economies like Zambia.

📎 Same link: https://canarycompass.substack.com/p/the-pie-repeal-and-the-reshaping

What we are witnessing with the proposed repeal of the Portfolio Interest Exemption (PIE) may mark a subtle but consequential shift in the global architecture of dollar liquidity, with serious implications for internally dollarized economies such as Zambia.

16/05/2025

"This does not yet amount to a capital firewall in the formal sense, but if these elements converge — tax disincentives, regulatory tightening, and digital asset integration — the net result may functionally resemble one. The recentralization of dollar intermediation would limit the flexibility of offshore actors and enhance U.S. oversight over monetary transmission. The eurodollar system is resilient, but it is not immutable. Even if partial or delayed, the repeal of PIE reflects a broader shift and may become one of several levers reconfiguring global dollar distribution over time.

To be clear, this is not a call for de-dollarization of international trade settlement or official reserves. Rather, it is a domestic-facing recommendation for emerging markets, particularly those with high levels of internal dollarization, to evaluate their vulnerability to a shifting dollar liquidity landscape."

Full article: https://canarycompass.substack.com/p/the-pie-repeal-and-the-reshaping

Ministry of Finance and National Planning, , Lusaka-Zambia
Bank of Zambia

What we are witnessing with the proposed repeal of the Portfolio Interest Exemption (PIE) may mark a subtle but consequential shift in the global architecture of dollar liquidity, with serious implications for internally dollarized economies such as Zambia.

13/05/2025

Ooof. This hit hard on every level. DJT dropped truth bombs with surgical precision.

“No, the gleaming marvels of Riyadh and Abu Dhabi, were not created by the so-called nation builders, Neocons or liberal nonprofits like those who spent trillions and trillions of dollars failing to develop Kabul, Baghdad, so many other cities.”

“In the end the so-called nation builders wrecked far more nations than they built and the interventionalists were intervening in complex societies that they didn't understand themselves. They told you how to do it but they had no idea how to do it themselves.”

“Peace, prosperity and progress came not from a radical rejection of your heritage but rather from embracing your national traditions and embracing that same heritage that you love so dearly.”

Every libertarian instinct should be nodding. Less meddling. More sovereignty. And above all, a return to self-determination.

The age of foreign saviors is ending and to be fair, the economic scorecard suggests Africa was never truly saved in the first place. We must now take full ownership of our future. That includes acknowledging our own responsibilities, while also encouraging external partners, past and present, to reflect more deeply on the limits of imported solutions and the importance of societal context, especially its complexity.

Original Post: https://x.com/VigilantFox/status/1922360870220312660

09/05/2025

Excerpt.

"Later this year, the IMF's Extended Credit Facility [ECF] expires. Whether Zambia transitions smoothly into a successor programme will serve as a critical signal for markets and development partners. Any delay may indicate political hesitation, particularly if authorities prefer to defer structural reforms until after the August 2026 elections.

If IMF engagement lapses, investors could question Zambia's policy commitment and financing assurances, particularly among bilateral and commercial creditors. The government should clarify its intentions regarding programme continuity and publish a credible roadmap before the current facility expires."

Full aricle below.

Chart Source: Bloomberg

08/05/2025

GDP size and growth, while often celebrated, should not be ends in themselves. The real question is: what is GDP for, and who does it serve? Growth that merely boosts headline figures without improving household wealth or enhancing strategic autonomy is hollow.

Internally, GDP should translate into inclusive prosperity through equitable wealth distribution and expanded access to opportunity. Externally, it should bolster national security and economic sovereignty. Growth without these anchors is neither sustainable nor nation-building, particularly in a world rapidly shifting toward multipolar realities and contested prosperity.

03/05/2025

"The Mole dug again. Not for trade, but to pass seeds wrapped in quiet truth. In the roots below, the Baobab shifted.

It no longer only listened. It thickened its bark and pressed its roots deeper. It remembered laughter that came with fear. It remembered stories that carried weight in court. It remembered copper stolen and lightless nights. It remembered who first stirred the cicadas to sing."

Original article:

An Allegory of the Plateau

23/04/2025

Bessent isn’t wrong on this. While much of the narrative remains fixated on U.S. actions, far too little is said about China’s deeply distortive trade practices: its long-standing currency management, state-backed overcapacity, and unfair competitive advantages that harm not just the U.S., but developing economies too, especially across Africa. China’s ultra-cheap exports have contributed to the decimation of local industries, flooding our markets and stalling the growth of Africa’s manufacturing base. Obviously, it’s not the only reason we remain stagnant in industrial development, but it’s a contributor.

Yes, China has financed infrastructure across Africa and that deserves recognition. Roads, ports, airports, and power lines now exist where there was once nothing. But infrastructure isn’t charity. It’s leverage. And in China’s case, it’s often been deployed strategically.

Many of these loans are non-concessional, non-transparent, and tied to Chinese contractors. They build the roads, they staff the projects, and they repatriate the profits. Local job creation is minimal. Skills transfer is rare. And debt sustainability becomes the next crisis waiting to happen.

To be fair, this isn’t unique to China. Western lenders, too, have a long history of imposing lopsided terms, structural conditions, and fiscal straitjackets. The difference is that China operates quietly behind closed doors, outside the Bretton Woods spotlight—and that opacity makes it harder to scrutinize.

So no, this isn’t about picking the U.S. over China. It’s about recognizing that both powers act in their own interest. The U.S. wears its ambition on its sleeve. China prefers to whisper while tightening its grip. But neither is here out of love for Africa.

We need to design our own playbook, and fast!

Original post: https://x.com/InfinitelyDean/status/1915102728411378103

23/04/2025

Have we established whether these new cyber laws permit legitimate critique of economic policy? For instance, if one were to argue that Zambia’s fiscal policy is misaligned with its monetary policy, would such an observation be deemed acceptable? Similarly, if someone were to suggest that, should fiscal consolidation efforts remain insufficient, a local debt restructuring would be imminent, could that be classified as disseminating misinformation?

The ambiguity in the wording is deeply problematic. As it stands, any analysis that deviates from the official economic narrative risks being labelled as destabilising. It effectively grants authorities the discretion to brand even well-founded, data-driven dissent as a threat to economic stability.

Ministry of Finance and National Planning, , Lusaka-Zambia Bank of Zambia We need urgent clarity. Without clear guidelines, we risk chilling constructive economic discourse precisely when needed.

Original post: https://x.com/InfinitelyDean/status/1914707353355661317

12/04/2025

Across many African capitals, we treat Singapore like a slogan, not a system. Everyone wants the Marina Bay skyline, but no one wants to do the decades of state reform, bureaucratic pruning, or policy discipline it took to get there. You cannot benchmark ambition on aesthetics. And yet, “Singapore of Africa” has become a mantra — recited by politicians who want authoritarian speed without institutional cost.

Singapore may inspire admiration, but China increasingly commands emulation. And while both are held up as examples of order and rapid development, their models are not interchangeable — and neither are their risks. We admire the outcomes without examining the foundations. This brings us to the question that cuts deeper: What kind of power does a rising China represent? And what happens to the world — particularly to Africa — if that power becomes normative?

Photo from Aljazeera