The Congolese government has bestowed its highest national honour on musician Fally Ipupa. A nice bit of news for the star, no doubt, but let us examine the economics behind this gesture. The Democratic Republic of Congo is a country rich in cobalt and copper, yet its currency is in freefall and its sovereign debt yields are among the highest in Africa.
Meanwhile, Ipupa sells out arenas from Paris to Kinshasa. The question is not whether he deserves the award, but whether the state can afford the distraction. Ceremonies cost money.
Money that could shore up the central bank's dwindling reserves. The message to markets is mixed: while Ipupa's global success is a soft power asset, the timing reeks of populism. Capital flight has already exceeded $1 billion this year.
Perhaps the government believes that cultural accolades will stem the tide. I doubt it. The bottom line: a star is honoured, but the fiscal deficit remains.
Investors should watch the G-sec yields, not the gramophone awards.
