34 Middle East & Africa The EconomistMarch 14th 2020
21Arab Emirates(uae), has an expansionary
budget meant to kick-start a weak econ-
omy. Some of this will have to be scaled
back. Expats in Dubai are already being hit
by lay-offs and salary cuts. Contractors in
Saudi Arabia worry that the government
will start delaying payments, as it did dur-
ing the last oil-price slump.
Low oil prices will be even more painful
in Iraq, which relies on the black stuff for
90% of government revenue. The country
is gripped by political paralysis. Months of
protests brought down the government in
October, and the prime minister-desig-
nate, Muhammad Tawfiq Allawi, failed to
form a new one. His predecessor raised
public spending by 45% last year and dou-
bled the deficit. Almost half its spending is
on public-sector wages and pensions; with
oil cheap, the state cannot make payroll.
In the long term, a sustained fall in the
price of oil may not be a bad thing for states
in the Middle East and Africa if it pushes
them to diversify. Though oil makes up a
huge proportion of exports and govern-
ment revenue in countries such as Angola
and Nigeria, neither is a big producer when
measured per person. Nigeria needs to “get
out of oil dependency”, says Charlie Rob-
ertson of Renaissance Capital, an invest-
ment bank. He recommends investing in
education, health and infrastructure. Pres-
ident João Lourenço of Angola, who took
over in 2017, has focused on lowering the
costs for producers. But producing oil in
Angola is still far from cheap.
The Gulf states talk a lot about diversifi-
cation, but their business cycles are still
hostage to oil prices. Muhammad bin Sal-
man, the crown prince and de facto ruler of
Saudi Arabia, has ambitious plans to invest
in everything from tourism to tech. Foreign
direct investment in the kingdom, though,
was already weak, partly due to worries
about Prince Muhammad’s arbitrary rule.
Confidence will not be boosted by his sur-
prise oil-price war. In the uae, perhaps the
most successfully diversified oil economy,
the main alternative to crude is tourism,
which provides 12% of gdp. But the co-
vid-19 outbreak has scared off visitors.
With less oil money around, African
and Middle Eastern leaders may find it
harder to keep the masses placid. In Angola
elections are due in 2022 and the mpla,
which has ruled since independence in
1975, may face a genuine challenge. In Nige-
ria, the emir of Kano, who is a former cen-
tral bank governor and critic of President
Muhammadu Buhari’s economic policies,
was dethroned on March 9th for showing
“insubordination” to local authorities. Just
before the oil price crashed, the authorities
in Saudi Arabia arrested several influential
royals, including Ahmed bin Abdel-Aziz,
the king’s brother. In the absence of black
gold, some strongmen will no doubt resort
to the iron fist. 7O
n a busystreet in Lagos, Nigeria’s
business centre, the usual horde of
motorbike-taxis jolting passengers
through evening gridlock is palpably
absent. The men who used to ride them
sit idly. “How do we feed our families?”
asks Stanley, a former rider.
The authorities confiscated his
motorbike after suddenly banning two-
and three-wheeled taxis, known as oka-
das(after a now-defunct airline, for their
ability to soar over traffic) and kekes. The
ban, which was imposed on February 1st
across big parts of the city, was intended
to make commuting safer. City authori-
ties absurdly blame the motorbikes for
congestion and, somewhat more plausi-
bly, for being involved in accidents.
Further issues, they said, were that
motorbikes are used by criminals and
have no place in the master plan they
have drawn up to improve the city.
Instead of ushering in modernity, the
ban has wrought chaos. Riders have
clashed with police and burned tyres in
the neighbourhood of Alimosho, west of
the city centre. Commuters have suf-
fered. At dawn thousands of people trek
by foot through inner-city streets. Those
able to take cars have done so, adding to
the city’s already insufferable gridlock:
one study before the ban found that
residents spent almost as much time
commuting to work (30 hours a week) as
they spent once they got there. To fill the
gap the government has laid on an extra65 buses. That is roughly one bus for
every 300,000 residents.
Another effect of the ban may be to
deter investment. Nigeria already has a
reputation for arbitrary governance;
making gridlock worse won’t help.
Among the worst-hit firms are Gokada, a
sort of Uber for motorcycle taxis, and
Max, a motorcycle courier business. Both
had attracted millions of dollars from
foreign investors. Valuations of both
have slumped. Lagos without okadas may
be both less liveable, and poorer.Two wheels bad, four wheels better
Traffic in NigeriaLAGOS
A ban on motorcycle taxis in Lagos is causing chaosAngry riderT
anzania’s president, John Magufuli,
has little sense of irony. He marked
International Women’s Day by tweeting
that his government wants to help women
“fulfil [their] responsibilities effectively”.
Those responsibilities evidently do not re-
quire an education: his government expels
girls from school if they become pregnant.
Mr Magufuli sounds less than empathetic
when discussing the matter. “After calcu-
lating some few mathematics, she’d be ask-
ing the teacher in the classroom: ‘Let me go
out and breastfeed my crying baby’,” heonce complained.
Aghast, the World Bank withheld a
$300m loan in 2018 that was intended to
fund secondary education. After some to-
ing and froing, Mr Magufuli promised to
expand a programme to teach young moth-
ers. The bank once again offered a loan, this
time of $500m.
Many people think it was wrong to do
so. One pundit dubbed the new deal “sepa-
rate but equal”, in a nod to the era when
schools for blacks and whites were segre-
gated in America. The analogy holds. ThereDAR ES SALAAM
Should donors fund schools that expel pregnant girls?Tanzania and the World BankBankrolling bigotry