August 19, 2022/United Capital Research

Anglophone West Africa
Nigeria

• The National Bureau of Statistics (NBS) published the Consumer Price Index (CPI) report for Jul-22. Headline inflation rose 104bps to 19.6% for the month, the highest level since Jan-2017, with the inflation basket expanding 1.8% m/m. Food inflation rose to 22.0% y/y, and core inflation remained elevated at 16.3% y/y.
• • In a recently released circular, the CBN, the Monetary Policy Committee (MPC), reviewed the minimum interest rate payable to savings deposits to 4.2% (previously 0.15%)- 30.0% of the MPR.
• According to the Nigeria Inter-Bank Settlement System (NIBSS), Nigerians spent a total of N1.7tn electronically on utility bills such as power, Pay TV subscriptions, and other everyday utilities in the first seven months of 2022. This represents a 32.1% increase from the N1.3tn that was spent in the corresponding 2021, indicating an increasing acceptance of electronic channels for bills payment by Nigerians.
• The Bank of Industry has disbursed over N1.2tn to 4.2mn enterprises and created over 9.1mn direct and indirect jobs between 2015 and 2021. This is in line with the bank’s successful completion of the €1.0bn Guaranteed Senior Loan Facility, further reiterating its capacity to deliver on its mandate for economic diversification.
• The National Union of Electricity Employees (NUEE)and the Senior Staff Association of Electricity and Allied Companies (SSAEAC) protested at offices of the TCN nationwide, shutting down facilities and beginning an indefinite strike. However, the union released a statement saying it had called off the strike on 18-Aug.
• The Minister of Finance, Budget and National Planning, Dr Zainab Ahmed, disclosed that states had received N471.9bn of the $1.5bn World Bank-assisted States Fiscal Transparency, Accountability and Sustainability Programme for Results.

Ghana

• Following its emergency MPC meeting on 17-Aug, the Bank of Ghana increased its benchmark interest rate by 300bps to 22.0%, its biggest margin since 2002, to tame inflation and stabilise the nation’s tumbling exchange rate at a special monetary policy meeting. It adds to 550bps of increases since November.
• The Norwegian energy company Aker energy has suspended its Ghanaian oil project over sanction fears due to the uncertainties of the Russia-Ukraine war and given Moscow-based Lukoil’s 38.0% interest in the license. Aker has decided not to submit its development plan until the challenge has been resolved.
• Aker holds a 50% interest in the Deepwater Tano Cape Three Points block in Ghana, including the Pecan project.

Francophone West Africa
Senegal

• The National Agency of Statistics and Demography released the country’s July CPI inflation numbers. The data revealed a 150bps climb in Senegal’s inflation print from 7.4% y/y in Jun-2022 to 8.9% y/y in Jul-2022.
• According to a Bloomberg report, Senegal is positioning itself as an alternative source of gas for Europe in a bid to bridge the existing lag caused by Russia’s oil supply cut.
• According to Mamadou Fall Kane, a Presidential adviser on energy and deputy permanent secretary of COZ-Petrogas, a committee that monitors and develops oil and gas projects, the country will be able to sell its quota to Europe, particularly Germany, in H2-2024.

Mali

• According to the Finance Ministry of Mali, the country paid off its external debt of about 85.1bn CFA franc (~$133.0mn) and syndicated loans totalling 66.0bn CFA franc after sanctions were eased in July.
• In addition, the country repaid 65.0bn CFA francs of debt auctioned on the regional market and used the proceeds of its 9-Aug issuance of 215.0bn CFA francs, its first sale this year, to settle the rest of its auction-based debt. Furthermore, the late-payment interest of 6.7bn CFA franc was also paid to investors.

East Africa
Kenya

• According to the Independent Electoral and Boundaries Commission (IEBC), William Ruto was declared the winner of Kenya’s presidential election by a razor-thin margin after seeing off a challenge from 5-time contender Raila Odinga, whose campaign officials and supporters rejected the official results. Ruto garnered 50.5% of the valid votes, while his main rival Odinga won 48.9%.
• According to the National Treasury, Kenya’s public debt rose by 11.7% y/y to Sh8.6tn in H1-2022 compared to Sh7.7tn recorded in H1-2021 and is attributed to external loan disbursements, exchange rate fluctuation and an uptick in domestic debt (increased by 15.9% to Sh4.3tn).
• According to market regulators, foreign credit rating companies seeking to operate in Kenya will be required to obtain a Capital Markets Authority (CMA) certificate of recognition based on the draft of the new regulations.

Rwanda

• The Central Bank of Rwanda raised its benchmark interest rate by 100bps, a first in 13 years, to 6.0% from 5.0% as rising inflationary pressures caused the apex bank to hike rates. The MPC noted that it would hike rates further and deploy other contractionary measures to bring the headline inflation rate back to the Central bank’s target rate of 2.0 – 8.0% by H2-2023.

Tanzania

• The Tanzania Revenue Authority published regulations on the VAT and digital services tax registration for non-resident service providers under the 2022 budget. The rules include but are not limited to disallowing the input tax claim for registered taxpayers and establishing penalties and interest for failure to submit returns and pay tax within the specified period.

Uganda

• The Bank of Uganda raised its benchmark interest rate by 50bps to 9.0% in Aug-2022 from 8.5% in Jul-2022 for the third consecutive month this year on the back of rising inflationary pressures in the country. The committee noted that there would be further rate hikes if inflationary pressures persist and emphasised its commitment to revert inflation to its medium-term target of 5.0%.
• According to Uganda’s Minister of Energy, the country will make an emergency purchase of 60.0MW of power from Kenya and plans to restart an idled 50.0MW thermal plant in Kampala, the country’s capital. This is in line with the government’s effort to stabilise supply after floods hit the 183.0MW Isimba plant’s powerhouse, forcing it to shut down.
• The Secretary to the Treasury disclosed Uganda’s plans to sell infrastructure bonds to help finance energy projects and develop its oil industry. The domestic debt will be used to expedite the commercialisation of the country’s oil and gas sector.

Southern Africa
South Africa

• According to Statistics South Africa (SSA), the nation’s retail sales declined 2.5% y/y, and R88.9bn worth of goods was traded. However, m/m seasonal adjusted sales moderated to -0.4% from a 1.2% m/m decline in May.
• According to Bloomberg reports, the BankservAfrica economic transaction index (which tracks interbank payments) declined from 136.4 to 134.5.
• To curtail the spread of the false codling moth, the EU released a new rule requiring south African orange exporters to apply cold treatment to produce. Lobbyists have estimated the new regulation to costs exporters $12.0mn.
• Statistics South Africa revealed the nation’s manufacturing production declined 3.5% y/y in June versus a -1.8% y/y in May. It fell 1.5%, m/m compared to +0.2 in May.
• In addition, mining production declined 8.0% y/y in June vs a 7.2% y/y decline in May. It fell 1.4% m/m, eroding its prior 1.2% m/m gain in May.

Angola

• The Instituto Nacional de Estatistica released the nation’s employment numbers; the unemployment rate declined from 30.8% in Q1-2022 to 30.25 in Q2-2022.
• The Instituto Nacional de Estatistica released the nation’s inflation numbers. The report showed consumer prices rose 21.4% in July versus a 23.0% y/y rise in June.
• In a statement released by the Finance Ministry, Angola, to smoothen debt amortisation and reduce refinancing risk, 32 domestic bonds linked to the exchange rate were extended to between four and ten years, from 2023 and 2024.

Zambia

• The Bank of Zambia decided to maintain its policy rate at 9.0% as the price increases began to wane.

Zimbabwe

• In a bid to incentivise gold miners, the Deputy Mines Minister, Polite Kambamura, stated that producers who exceed their state-set output targets would receive 80.0% of the payment for the additional output in foreign currency (vs the current 60-40 split between foreign and local currency).
• According to the Zimbabwe National Statistics Agency, the nation’s June exports rose 29.9% m/m to $666.6mn, driven by gold and nickel earnings. The $133.6mn (+62.0%) in income from nickel products dampened the 8.0% decline in gold earnings ($152.2mn).
• The Zimbabwe Energy Regulatory Authority increased fuel prices; the price of gasoline rose from Z$710.65 to Z$768.35/Litre, while diesel prices rose from Z$774.15 to Z$851.14.
• The Permanent Secretary of Finance, George Guvamatanga, sent an order to the relevant bodies expressing that the nation would suspend all payments to government contractors to reduce the depreciation of its currency, fueling hyperinflation.
• Zimbabwe’s Central Bank Governor, John Mangudya, revealed that the apex bank plans to maintain a tight monetary policy stance for the next six months to help curb inflation surge and exchange-rate volatility.

Central Africa
Democratic Republic of Congo

• According to a statement from Virunga National Park, artillery fire caused significant damage to the country’s biggest energy production project last week (the European Union-financed hydroelectric project) in the country’s eastern region, Rwanguba, which resulted in civilian casualties.