August 27, 2021/United Capital Report

Anglophone West Africa
Nigeria

• During the week, the National Bureau of Statistics (NBS) published the Q2-2021 GDP report. In line with expectations, economic activities expanded in Q2-2021 with GDP growing by 5.0% y/y representing the slow but steady economic recovery. The strong growth was largely supported by the low base from Q2-2020 (where the economy contracted by 6.1% y/y). However, we are concerned with the fact that the economy contracted 0.8% q/q in a quarter where economic activities are historically higher.
• Despite the signing of the Petroleum Industry Bill (PIB), Fitch Solutions Country Risk & Industry Research reported that attracting new oil and gas investment to Nigeria over other destinations is likely to be difficult as more capital will be diverted towards alternative energy and high margin barrels when decarbonisation efforts are executed.
• In a communication via the President’s official Facebook page, he announced that the Nigerian National Petroleum Commission (NNPC) recorded a profit of N287.0bn in FY-2020, following conclusion of the statutory annual audit exercise for 2020.
• Dr Yemi Kale’s tenure as the Statistician-General of the Federation came to an end this month after his second term of five years expired with Dr Simon Harry appointed as his successor.  
• During the week, the Central Bank of Nigeria (CBN) conducted an NTB auction and investors’ appetite for the 91-day and 364-day bills were high as they recorded subscription rates of 1.6x and 3.0x. On the other hand, the 182-day bill did not generate as much interest as it recorded subscription rate of 0.7x. Overall, the auction received total bids of N394.1bn while the CBN sold N307.3bn worth of bills against the N157.2bn it initially offered.
• The Nigerian National Petroleum Corporation (NNPC) has provided a base crude oil price scenario in the medium term, stating that the commodity’s base oil price for 2022 has been pegged at $57.0/barrel and announced the oil base price for 2023 at $61.0/barrel.
• The Nigerian National Petroleum Corporation (NNPC) has disclosed that individuals would have the opportunity to acquire stakes in the new Nigerian National Petroleum Company Limited as stated in the Petroleum Industry Act. The new oil firm currently has government shareholders represented by the Minister of Finance.

Ghana

• The Ministry of Energy has begun preparatory activities for the implementation of the country’s flagship climate financed renewable energy programme with a price tag of $230.0m. The programme is expected to take off in 2022, providing more than 250,000 Ghanaians and 15,000 small and medium private sector enterprises with cheap and clean renewable energy.
• Ghana’s cashew sector, the 10th largest in the world, is set to get a boost, as stakeholders are gathering inputs into the National Cashew Strategy document, to improve cashew production across the value chain in order to produce some of the highest quality nuts in the world. The Strategy is expected to create an enabling environment for sector actors, ensure sustainable increase in productivity of cashew farmers, creating a competitive sustainable local processing industry.
• UK Prime Minister Boris Johnson appointed a new Trade Envoy to Ghana to strengthen UK-Ghana trade, drive mutually prosperous partnership and help both British and Ghanaian businesses to find new export and investment opportunities
• The Managing Director of the International Monetary Fund (IMF) announced the organisation has begun allocating Special Drawing Rights (SDRs) of about $650.0bn of which Ghana is entitled to 707.3m SDR with an equivalent value of roughly $1.0bn.

Liberia

• The EU has called for implementation of basic democratic reforms ahead of Liberia’s 2023 elections as they are considered critical to peace and stability in Liberia. It was also reported that if the EU’s recommendations were not considered, the country risks the withdrawal of all financial support toward elections after $62.2 m was donated to help fund the 2017 elections.
• There are renewed concerns emerging on the possibility of the short supply of rice as importers continue to highlight several bottlenecks which if not taken care off by the government would leave them with no choice but to halt importation of rice.  

Francophone West Africa
Ivory Coast

• The Minister of Health announced Ivory Coast first recorded Ebola case since 1994 has been taken out of isolation after two biological tests performed at 48-hour intervals came back negative. The World Health Organization (WHO) identified 49 people who were in contact with the woman, and Ivory Coast started a vaccination campaign earlier this month.

East Africa
Kenya

• The value of Kenya’s external trade rose 24.3% y/y to KSh1.4tn in H1-2021, amid the rebound in global and domestic economic conditions in line with recovery from Covid-19 related disruption to trade in 2020.
• The East African Community (EAC) and Common Market for Eastern and Southern Africa (COMESA) are laying the groundwork for a digital payment system to integrate informal cross-border trade into formal markets within the Comesa bloc. Kenya, alongside Tanzania, Uganda, Rwanda, Ethiopia, Zambia and Mauritius are in the pilot phase of the initiative.
• KCB Group Plc has completed its acquisition of a majority stake in Rwandan bank, Banque Populaire du Rwanda Plc (BPR). The group acquired shares from previous equity holders – Arise B.V and Atlas Mara Limited (Mauritius).

 
Uganda

• According to the Ministry of Finance, Planning and Economic Development’s monthly economic performance report for Jul-2021, export receipts declined by 3.9% from $470.0m (Shs1.7tn) in May-2021 to $451.7m (Shs1.6tn) in Jun-2021. This was attributed to a decline in commodity exports.
• Relatedly, the report showed that government spending amounted to Shs2.6tn in Jul-2021, a 103.0% performance against budgeted expenditure.
• The increase in government spending was driven by the need for additional support for health sector as well as to provide economic relief to certain segments of the population affected by the Covid-19-related shutdown.
• Revenue receipts were equally affected by restrictions to curb the rapid spread of Covid-19 which hindered economic activity during the month, resulting in a deficit of Sh1.2tn, against a budgeted deficit of Sh935.8bn

Rwanda

• The International Monetary Fund (IMF) allocated $218.0m worth of SDRs to Rwanda, in a broader effort to support countries as they recover from the pandemic.
• The Rwandan Ministry of Health, commenced the third phase of the country’s vaccination campaign on 23-Aug. The drive targets Rwandans aged 18 and above, and kicked off in the capital, Kigali.

Ethiopia

• The Ethiopian Diaspora Agency said it is working to increase remittances from the Diaspora to 4.0bn birr in the new fiscal year, from 3.6bn birr in the previous year.
• According to the Addis Ababa City Administration Health Bureau, the third wave of Covid-19 has begun in Ethiopia. The Bureau cited a sharp increase in the number of people seriously ill with Covid-19 over the past four weeks and the number deaths.

Southern Africa 
South Africa 

• South Africa’s unemployment rate surged to a new record of 34.4% in Q2-2021 as against 32.6% in Q1-2021. Consequently, it implies that the country has the highest unemployment rate in the world. The number of employed individuals fell by 54,000 to roughly 14.9m, while the number of unemployed people skyrocketed to 7.8m in Q2-2021 (up by 584,000).
• According to a recent report from the Statistics South Africa, the country’s economy is 11.0% bigger than previously estimated as the authorities changed the way they calculated Gross Domestic Product (GDP). The office altered its methodology for calculating the data by changing the reference year to 2015 from 2010 and refined its classification activities to better reflect the structure of the economy.
• According to figures from Statistics South Africa, South Africa’s producer price inflation eased in Jul-2021 as it rose by 7.1% y/y, compared to the 7.7% increase in Jun-2021. The main driver of the increase came from coke, petroleum products, chemicals, rubber and plastic products, etc.

Angola

• According to the Bank of Angola, the country’s net reserves fell by $8.3bn in Jul-2021. Also, gross reserves declined by 0.7% to $15.1bn.
• Angola received over $1.0bn as Special Drawing Rights (SDRs) from the International Monetary Fund (IMF) to help combat the effects of the Covid-19 pandemic. The allocation is also expected to help kickstart a new growth cycle, including greater inclusion of the private sector.
• The Secretary of State for Oil and Gas, Alexandre Barroso, reported that Angola has exported 97.9m barrel of crude oil in Q2-2021, down by 13.9% q/q. He also added that the country’s gross earnings from oil sales amounted to $6.7bn within the period, up by 0.1% q/q.

Namibia 

• The Namibia Statistics Agency (NSA) published its latest Annual National Accounts for 2020, revising its growth figure for 2020 from a contraction of 8.0% of GDP in its previous preliminary report to 8.5%. The severe contraction was mainly attributed to the effects of the Covid-19 pandemic.
• The unrelenting impacts of the pandemic as a result of the highly infectious delta variant and the disappointing Q1-2021 results (real GDP contracted by 6.5% compared to Q1-2020) highlights Namibia’s limited growth prospects in 2021.

 
Zambia 

• According to the Zambia Statistics Agency, the country’s annual inflation for the month of Aug-2021 eased to 24.4% y/y, compared to the 24.6% y/y increase in Jul-2021. On a monthly basis, prices roses by 0.4% m/m from 0.3% in Jul-2021. The largest component of the Consumer Price Index (CPI), food, rose by 31.6% y/y compared to 31.2% y/y in the previous month.

Zimbabwe 

• Zimbabwe will use more than half of the $961.0m it has been allocated by the International Monetary Fund (IMF) in the form of Special Drawing Rights (SDRs) to support its beleaguered currency.
• The government of Zimbabwe has decided to reopen schools following a decline in new Covid-19 infections in the country. The new school term was supposed to commence Jun-2021, but it was put on hold for two months following a surge in new infections and deaths.
• In view of schools reopening, the country will begin the administration of Covid-19 vaccination to those aged 14-17 years and would be permitting only fully vaccinated people to eat in restaurants. This will make Zimbabwe one of the first African countries in Africa to administer the vaccines to children.

Central Africa
Cameroon 

• The National Commission for Refugee, Migrants and Internally Displaced (NCFRMI) disclosed that over 73,000 Cameroonians refugees are registered in Nigeria. This is largely due to the lingering political crisis since 2016, which has led to human rights violations, the loss of lives and properties.

Gabon 

• Fitch Ratings has upgraded Gabon from a “CCC” to a “B-” rating. This upgrade reflects a recent easing in liquidity pressures on the back of higher oil prices and the announcement of a new IMF programme.
• Out of a population of 2.0 million, only 80,000 Gabonese have received the first dose of the covid-19 vaccine, representing only 4.0% of the population. The vaccination campaign aims to vaccinate 60.0% of the population, that is 1.2 million citizens.

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