July 29, 2022/United Capital Research

Anglophone West Africa

Nigeria

• The International Monetary Fund (IMF) released its World Economic Outlook report yesterday. In the report, the IMF retained its 3.4% growth projection for Nigeria in 2022 but raised its growth projections for 2023 by 0.1ppt to 3.2%.
• The Federal Government announced through the Minister of Agriculture and Rural Development, Abubakar Mahmood, that it has approved a ban on the direct purchase of agricultural produce from local farmers by foreign merchants. The ban was implemented to protect the interests of local farmers.
• The FG at the close of the Federal Executive Council (FEC) meeting last week approved the leasing of 3 aircrafts produced by Boeing and Airbus, solely running domestic routes.
• Recent Data from the Nigerian Manufacturers Association of Nigeria revealed that the worth of goods manufactured declined 21.6% between 2017 and 2021 as N9.4tn worth of goods were manufactured in 2017 but plunged to N7.4tn by the end of 2021.
• The Premium Breadmakers Association of Nigeria (PBAN) suspended its 4-day strike last week. It resolved to increase its bread price by 10.0% and master bakers increased their price by 20.0%. The strike followed the Federal Government’s (FG)15.0% wheat development levy, NAFDAC’s N154,000 penalty charge on late renewal of certificates and the inability of its members to access the CBN’s grants and soft loans.
• According to a statement from the office of the Senate President, the Senate has set out a plan to summon the Governor of the CBN, Godwin Emefiele, to explain the rapid depreciation of the naira last week.
• The Lagos Commodities and Futures Exchange, just recently licensed by the Securities and Exchange Commission (SEC) to trade gold with the specification of the London Bullion Market Association’s 99.99% purity, targeting globally acceptable pricing and quality, started trading in gold ahead of its official launch.

Ghana

• The Central Bank of Ghana in its recently concluded monetary policy committee meeting, voted unanimously to hold the country’s benchmark interest rate at 19.0%, divergent from the hike expectations.
• Furthermore, the decision to hold the benchmark interest rate constant comes off the back of the prevailing signs that rampant inflation may be levelling off amid concerns for the deteriorating economic growth of the country.
• According to the Ministry of Finance, Ghana has reduced expectations for revenue collection from the newly introduced electronic transactions levy this year by at least 10 times, from initial projection of GHC7.0bn to GHC611.0mn, after the rate was cut and implementation delayed.
• Also, the Ministry of Finance, revised downward the country’s 2022 budget deficit target from 7.4% of GDP to 6.6% of GDP, to settle at GHC38.9bn, as the country’s growth forecast for 2022 was cut to 3.7% from 5.8%.
• Furthermore, according to the finance minister, although the deficit is expected to be financed from both foreign and domestic sources, domestic financing will be the key driver while the government works to regain external market access.
• Also, the Bank of Ghana in its summary of economic and financial data on its website disclosed the country’s total public debt had widened further to 78.3% of the nation’s GDP, climbing to GHC393.4bn as of June-30, from GHC334.8bn a year earlier.
• According to data published by the Central Bank of Ghana, Ghana’s Gross reserves declined to $7.7bn while Net reserves declined to $3.6bn in June, the lowest level since Nov-2018.
• Extracts from the recently released M2 money supply statistic by the Bank of Ghana, the country’s M2 money supply climbed 13.0% y/y in June, indicating continuous climb in the money in circulation in the Ghanaian economy.

Francophone West Africa (WAEMU)

Senegal

• The African Development Bank (AfDB) Group Board has approved $1.0bn for emergency food production and cash injection. The package aims to help African countries (Senegal included) mitigate rising food prices and inflation caused by Russia’s war in Ukraine, climate change and the Covid-19 pandemic.
• Senegal’s main opposition coalition is vying to gain clout in legislative polls that will set the scene for the presidential election in 2024, which could see the incumbent President, Macky Sall, run for a controversial third term.

Mali

• Mali has expelled the spokesman of the UN’s peacekeeping force in the country over social media posts concerning the presence of Ivorian troops in the country. This comes amid mounting friction between Mali’s ruling military and international partners supporting the country’s fight against jihadists.

Ivory Coast

• The government of Ivory Coast has raised cotton prices for the 2022-23 season by 3.3% to XAF310 compared to XAF300 the previous season. Notably, the country produced 539,000 metric tonnes of cotton in 2021-22 compared with 559,000 tonnes the previous season.
• According to the Ivorian oil minister, Eni, an Italian oil company, made its second discovery of crude oil and natural gas in the offshore block CI-802. The block, part of the Baleine deposit, could increase oil production estimates to 2.5mn barrels and 3.3tn cubic feet of associated gas. Eni is committed to starting production from the Baleine deposit in H1-2023.
• Standard Bank announced that it had closed the $91.0mn financing for constructing the new Ivorian port terminal in the San Pedro Port. The terminal provides a gateway for cocoa exports between San Pedro and neighbouring countries like Liberia, Mali, Burkina Faso, and Guinea.

East Africa

Kenya

• An appraisal report by an IMF team recommended that Kenya place tighter checks on banking transactions amid corruption-related money laundering and counter financing of terrorism concerns particularly in higher-risk sectors, employing financial intelligence tools.
• Kenya officially signed a Power Purchase Agreement (PPA) contract with Ethiopia for the purchase of hydroelectric power. Kenya is expected to purchase 200MW from Ethiopia in the first phase of the multi-phased project before it is scaled up to 400MW in the next phase.

Rwanda

• The US Secretary of State, Anthony Blinken, is expected to visit Rwanda and the Democratic Republic of Congo (DRC) in Aug-22 in a move to douse tensions between both countries concerning the crisis in Eastern Congo, the M23 rebellion, elections, and mining contracts.

Tanzania

• The African Development Bank (AfDB) and the African Guarantee Fund (AGF) have signed a $110.0mn bouquet of financing facilities with CRDB Bank, Tanzania, to improve women’s access to finance. It comprises a $60.0mn financial package from the AfDB and $50.0mn from the AGF.
• According to the Airport manager, ongoing expansion of the Mwanza airport, including new terminal construction and runway extension, are set for completion in Dec-22. International flights will then commence from the airport.
• The Energy Minister, January Makamba, disclosed that construction of the plastic factory whose products will ensure heat retention in the East African Oil Pipeline (EACOP) is set for completion in Dec-22.

Uganda

• The Public Service Permanent Secretary in a letter sent to all ministries, departments, agencies, and local governments announced a delay in 28-July-22 salary payments to all public officers. By issue of the letter, financial institutions were informed accordingly and requested to waive penalties on late loan repayments by public officers.
• The Government’s financial year runs from July-June. A delay in the issuance of the salary structure for FY 2022/23 has been blamed for the spill-over effect on the timelines for processing and payment of salaries for July-22.

Southern Africa

Angola

• Bloomberg reports highlighted that in an email statement released by the Angolan Ministry of Petroleum, Angola exported 103.6mn barrels of crude oil at an average price of $113.91 in Q2-2022.
• China accounted for 55.0% of exports in Q2 with Angola earning $11.8bn from oil exports in Q2-2022.

South Africa

• The Botswana Power Corporation, in a bid to improve its load management, is in talks with Eskom of South Africa to sell its excess electricity power during the weekend off-peak periods to South Africa. According to data from CEIC, electricity production in South Africa stood at 20,587.0GWh.
• According to a statement released by the South African government, it has scrapped the licensing rules for private power generation. Private producers can now establish power plants with unlimited capacity versus the previous cap of 100.0MW.
• According to Bloomberg reports, the unfavourable market condition is making the South African authorities consider its first Samurai bond in over 20 years. This is in addition to the $3.0bn raised in the Eurobond market three months ago.
• The South African Reserve Bank (SARB) has adjusted its repurchase rates forecasts to 6.45% and 6.78% at the end of 2023 and 2024, respectively, from 6.21% and 6.74% at the end of 2023 and 2024.
• Gwede Mantashe, the Mineral Resources and Energy Minister, issued an invite for comments from stakeholders to be submitted within 30 days of the public notice of the plan to introduce a cap on the price of 93-octane gasoline.
• Daniel Mminele, the former apex bank governor, revealed in a statement that the South African Government aims to begin accessing part of the $8.5bn in climate funding pledged by some of the world’s wealthiest nations in early 2023.
• According to South Africa’s Statistics department, producer prices rose 16.2% y/y in June versus 14.7% in May. A 2.1% m/m increase.

Zambia

• Humphery Nwugo, the regional Chief Operating Officer of the African Export-Import Bank (AFREXIM Bank), revealed the bank’s planned investment of more than $1.5bn to stimulate growth in the nation.
• According to reports from the Zambia Statistics Agency, the nation’s trade surplus declined from ZK3.4bn in May to ZK2.1bn in June.
• The Nation’s H1-2022 copper exports declined 0.5% y/y from 447,100 metric tonnes in the same period in 2021 to 445,500 metric tonnes. The Zambia Statistic Agency also revealed export earnings slumped by 13.0% in June due to lower prices at the London Metal Exchange.
• The Zambia Statistics Agency revealed the nation’s consumer prices climbed to 9.9% in July versus 9.7% in June. Prices rose 0.4% m/m versus the 0.9% m/m increase in June.
• The AFREXIM Bank President, Benedict Oramah, revealed the bank is set to provide a $250.0mn initial investment to produce an electric-car battery plant in the nation
• According to media reports, the nation’s state-owned power utility Zesco is set to disburse 100MW to Zimbabwe under a five-year deal.
• The Zambian Finance minister, on instruction from the President, is seeking the parliament’s approval for a supplementary budget of about ZK22.0 bn. This would take the 2022 budget to KZ195.0bn.

Zimbabwe

• The Reserve Bank of Zimbabwe announced the launch of gold coins to be sold to the public to combat the hyperinflation that eroded the country’s currency. The coins would be one ounce 22-carat have a serial number and sold at the prevailing international price of gold.
• According to Bloomberg reports, the nation’s power utility company ZESA Holdings Ltd. is raising Mines power tariff by 8.0% to meet production costs as it struggles to service its power import debt. Exporters like mines would be required to pay c. $0.11/KWh from August.

• The Zimbabwe Energy Regulatory Authority has reduced the maximum petrol and diesel prices from $1.7 to $1.6/litre. While diesel decreased to $1.76/litre for diesel from $1.8/litre.

Central Africa

Cameroon

• The International Monetary Fund (IMF) has approved the second review of the agreements with Cameroon under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF). The approval gives the country access to $72.9mn (CFA46.8bn). Cameroon’s performance under the 3-year program remains on track, and structural reforms are advancing, albeit with delays in critical areas.
• In addition, the IMF forecasted that the country’s economy will grow 4.6% in 2023, up from 3.8% this year, noting a continued drive by the government to cut spending. Inflation is projected to rise to 4.6% in 2022 but will likely stay below 3.0% in the medium term.

Democratic Republic of Congo (DRC)

• The government of DRC has tightened security in the country on the back of the recent anti-UN unrest which led to the death of 15 persons, including three UN peacekeepers. The UN mission in the DRC, known as MONUSCO, is one of the biggest peacekeeping operations. Still, it has come under regular criticism in Congo’s troubled east, where many accuse it of failing to do enough to end decade-old attacks by armed groups.