July 1, 2022/United Capital Research

Anglophone West Africa

Nigeria

• According to industry data from the Nigerian Electricity Regulatory Commission (NERC), electricity distribution companies’ (DisCos) payment to generation companies (GenCos) for electricity generation has dropped by 50.0%. The statistics showed that DisCos were unable to pay GenCos full payment for the quantity of power generated in Jan-2022 as the generation companies recorded a 50.0% revenue shortfall.
• According to the 2021 Subscriber/Network Data Annual Report published by the Nigerian Communications Commission (NCC), broadband penetration and tele-density declined in 2021. The NCC report noted that tele-density in Nigeria decreased from 107.2% in 2020 to 102.4% in 2021. For broadband penetration, there was a decrease from 45.0% in 2020 to 40.9% in 2021. Surging operations costs and vandalism of telecoms infrastructure were the primary reasons for the slowdown.
• The Federal Accounts Allocation Committee (FAAC) disbursed N680.8bn to Federal, State, and Local governments. This represents a 29.9% decline from the peak period of Jul-2021 where N970.6bn was disbursed. The decline is a result of fiscal challenges facing Nigeria as crude oil revenue continues to plunge.
• According to media reports, the country’s oil production declined by 11.63mn bpd between January and May this year. Resulting in a loss of about N550.6bn of accruable revenues to Nigeria from the sale of crude oil.
• According to media reports, the Organized Private Sector Exporters Association has appealed to the National Assembly to urgently ratify the approval of the N375.0bn by the Federal Government on the backlog of the Export Expansion Grants for exporters.
• According to figures released by the Nigerian National Petroleum Company Limited (NNPC), the amount spent as subsidy on Premium Motor Spirit (PMS), popularly called petrol, and on refinery rehabilitation between January and May this year amounts to N1.3tn. Interestingly, only N27.3bn has been spent on refinery rehabilitation with the balance going on PMS subsidy payments. NNPC disclosed this in its latest presentation to the Federation Account Allocation Committee meeting for Jun-2022.

Ghana

• On the back of the increase in the private sector’s economic participation, especially in agriculture, the African Development Bank (AfDB) forecasts that the country’s economy is set to grow by 5.3% in 2022.
• The Minister of Trade and Industry, Alan Kyerematen, is advocating the establishment of a Loan Guarantee Scheme that will offer liquidity in the banks to support the development of Micro Small and Medium Enterprises (MSMEs).
• According to a statement issued by the Bank of Ghana (BoG), the apex bank and the Cyber Security Authority (CSA) have pledged to improve cybersecurity in the banking sector by deliberating various ways of collaborating to implement the Cybersecurity Act, 2020 (Act 1038).

Francophone West Africa

Ivory Coast

• According to Bloomberg, Ivory Coast’s Ministry of Economy and Finance signed a Memorandum of Understanding with the Global Center on Adaptation to increase the share of adaptation and resilience investments financed by the country’s forthcoming €2.0bn Sustainable Bond Program.
• Media reports revealed Heavy rainfall continues to affect Abidjan City (south-eastern Ivory Coast), causing landslides, and widespread flooding which resulted in disruptions in economic activities.
• Farmers in the coastal region express concerns that the above-average rains could damage the next October-to-March main crop harvest season. This potentially has severe consequences for agricultural sector’s output.
• According to media reports, illegal cocoa farming and logging could result in a total depletion of the country’s forest cover by 2034. The nation lost 47,000 hectares of forest in its cocoa belt in 2020.

 
Senegal

• Recent reports revealed that Senegal is francophone Africa’s second-biggest mover on a Global Startup ecosystem ranking after Morocco, moving to the 92^nd position globally. This is a trend that if sustained, could significantly boost the visibility of startups in the country and provide access to growth investors funds.
• The Minister of Tourism and Air Transport, Alioune Sarr, met with Qatar’s Minister of Transport, Jassim Saif Ahmed to deliberate on how to further enhance cooperation in air transportation and civil aviation.

East Africa

Kenya

• The International Monetary Fund (IMF) Executive Board is primed to delay its approval to disburse a KSh28.7bn loan to Kenya. This follows the staff level agreement between Kenyan authorities and IMF staff in April that marked the third formal assessment of the 38-month program that will see cumulative disbursements of KSh275.0bn to Kenya. This syndicated loan was intended by the National Treasury to plug a widening fiscal gap.
• As part of Kenya’s partnership with the World Bank and SNV Netherlands Development Organisation through the Kenya Off-grid Solar Access Project (KOSAP), a KSh390.0mn state-funded deal with 14 private firms is set to provide solar energy for 14 counties. Renewable energy currently accounts for 73.0% of Kenya’s installed power generation capacity and 90.0% of her electricity in use is from green sources, among them geothermal, wind, solar and hydro-electric installations. The country aims to have 600.0MW of solar power by 2030.

 
Rwanda

• On 29-Jun, the parliament passed the Rwf4,658.4bn national budget for the next fiscal year. This represents a 4.9% (Rwf217.8bn) increase from the 2021-22 budget. It is planned to plug urgent financing gaps as subsidies for the Crop Intensification Programme (CIP) which was allocated Rwf31.0bn against the required Rwf56.8 bn. The next fiscal year begins 01-Jul-22.

 
Tanzania

• The Association of Tanzania Oil and Gas Service Providers (ATOGS) has hosted a delegation from the Petroleum Technology Association of Nigeria (PETAN) in a two-day talk to foster collaboration and partnership on joint venture bidding and financing for projects and all business opportunities available in the Oil and Gas sector.
• Other objectives include sharing Nigerian Local Content experience in the oil and gas sector and sharing deep offshore capabilities and technological experience.

 
Uganda

• A principal official at the Ministry of Finance, Planning and Economic Development has blamed the discrepancies in the transfer of funds to local government administration units under the Integrated Financial Management System (IFMS) on the district technocrats. The system has in the past year faced a lot of criticism from local government administration units across the country over delayed remittances of funds to finance development plans.

 
Southern Africa

Angola

• Angola seeks to privatise the Port of Lobito with a 20-year concession to attract investment and boost the economy. The Lobito corridor railway is 1,300km inland and crosses 34.0% of Angola’s agricultural production, serving as the quickest export route for Copper, Cobalt and other Ores from Zambia and the Democratic Republic of the Congo.
• According to data from the country’s finance ministry, Angola’s oil revenue rose to US$2.1bn in May, from US$1.4bn in April, as sustained bullish momentum in crude oil prices continue to bode well for export earnings.
• As a result of improvement in crude oil earnings, Angola has resumed repayment of Chinese debt 18 months ahead of the scheduled end of the agreed three-year moratorium agreed with Chinese lenders in Jun-2020. For context, data from REDD Intelligence (quoted by South China Morning Post and Macao News) showed that debt owed to Chinese creditors decreased by US$351.0mn to US%21.4bn in Q1-2022, after two years of stability at US$22.0bn levels.      

South Africa

• According to data release by Statistics South Africa, South Africa’s Producer Price Index (PPI) rose 14.7% y/y in May, from 13.1% in April, its highest level since Sep-2008 when it was at 16.0%.
• The Governor of the Central Bank, Lesetja Kganyago, says the SA Reserve Bank may consider raising interest rates by 50bps in July. The next MPC meeting is scheduled for 21-Jul.
• Following worker strikes and protests that led to the country’s worst blackouts since 2019, Eskom, the State-owned utility, offered workers a 1-year 7.0% wage increase. Eskom is currently R396.0bn in debt and relies on government bailouts to run. Labour groups are expected to present the revised offer to members before negotiations resume on 1-Jul.
• The National Department of Health has confirmed the 2^nd case of Monkeypox in the Mother City. This follows a case identified in Gauteng last week. The disease has previously been reported in other African countries including Nigeria, DR Congo, the Central African Republic, and Ghana, though predominantly in Europe.

 
Zambia

• According to media reports, the Minister of Agriculture Michael Katambo says his ministry is owing seed companies that supplied the input under the Farming Input Support Program (FISP) for the 2016/17 and 2017/18 farming season about ZMW56.4mn due to budgetary constraints the ministry faced in programme implementation.
• According to media reports, the Minister of Commerce, Trade and Industry Chipoka Mulenga says government is in the process of renegotiating some clauses in the African Continental Free Trade Agreement (AfCFTA).

 
Zimbabwe

• The Monetary Policy Committee (MPC) in Zimbabwe more than doubled its key policy rate, raising it to 200.0%, from 80.0% previously, becoming the most aggressive central bank in the world. Furthermore, it reintroduced the US dollar as a legal currency in bid to tame surging inflation and stabilise the country’s tumbling exchange rate.
• Media reports highlighted that President Emmerson Mnangagwa commissioned a US$20.0mn edible oil refinery plant in Mahusekwa Mashonaland East, driven by FG’s desire to produce adequate food for its citizens.
• President Mnangagwa is on track to launch the €3.0mn Great Zimbabwe Development Project for the rehabilitation and development of the World Heritage Site in Masvingo. It aims at maximizing benefits accrued from the tourism spectacle.

  
Central Africa

Cameroon

• IMF staff and Cameroonian authorities have reached a staff-level agreement on policies that could support the Executive Board’s approval of the second review of the program under the ECF and EFF arrangements and lead to the disbursement of SDR55.2mn (about US$73.6mn).
• 2021 Economic growth for Cameroon is estimated at 3.6%, slightly higher than previous IMF forecasts.
• Fiscal authorities are revising the 2022 budget in bid to provide a response to the surge in fuel and food import prices.
• The Cameroonian government has secured financing of €79.4mn (about CFA52.0bn) from the Islamic Development Bank (IsDB) to support its local rice industry.
• According to media reports, Cameroon’s President Paul Biya sent a delegation to Europe to try to encourage Cameroonians living there to invest back home. However, members of Cameroon’s diaspora say undemocratic practices and corruption in Biya’s government reduces the allure of investment opportunities.

Democratic Republic of Congo (DRC)

• Intelsat’s Cellbackhaul offers DRC Mobile Operators a new business to reach remote areas not connected to Fibre optic cables, a major gamechanger for internet penetration in Congo.
• According to media reports, the top United Nations official for the Democratic Republic of Congo stated that the resurgent M23 rebel group in the country’s east is well-armed and equipped, posing a growing threat to civilians.