October 7, 2022/United Capital Research

Anglophone West Africa

Nigeria

• Sequel to the consideration of the report of its Joint Committee on Finance and National Planning on the 2023-25 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), as proposed by the President to the National Assembly, the Senate approved the 2023-25 MTEF and FSP ahead of the presentation of the 2023 budget proposals by the President on Friday.
• Among the parameters approved include the oil price benchmark of $73.00/bbl, the exchange rate of N437.57/$, N3.6tn as subsidy on petroleum products for 2023, projected borrowings of N8.44tn, including foreign and domestic borrowings (subject to the approval by the National Assembly), a retained revenue of N9.35tn due to increased oil benchmark, fiscal deficit of N10.56tn, estimated debt servicing of N6.31tn, among others.
• The Nation’s Finance Committee proposed a reduction of the N3.6tn proposed for subsidy in the 2023 budget by the executive to N1.7tn. However, the Senate kicked against the committee’s proposal.
• According to data released by the Debt Management Office (DMO), the Federal Government’s (FG) domestic debt service printed at N1.3trn in H1-2022 versus N935.5bn in H1-2021 and N1.2trn in H2-2022. Nigeria’s debt stock printed at $103.31bn in Jun-2022, $63.3bn of which is domestic debt.
• Mele Kyari, the Group CEO of Nigerian National Petroleum Company Limited, yesterday announced that the NNPC as a corporation grew its PAT from N287.0bn in 2020 to N674.0bn in 2021, as contained in the Group’s audited financial statement.
• According to Bloomberg reports, China, Nigeria’s biggest bilateral creditor, is scaling back lending in the continent. Rising interest rates globally and shrinking liquidity have sent risky African Eurobonds and currencies to near-pandemic lows. According to the Debt Management Office (DMO), Nigeria’s external debt owed to China accounts for 83.6% of its total bilateral debt as of 30 June 2022, totalling $3.9bn. It represents a 12.7% y/y increase from $3.5bn in H1-2021.
• In a statement by its Head of Strategy and Communication, the Nigeria Export-Import Bank (NEXIM) disclosed that a sub-Saharan regional shipping line, Sealink, will commence operations between Q4-2022 and Q1-2023. He stated that the Sealink project was conceived to eliminate Nigeria’s dependence on foreign vessels, which are affected by foreign exchanges.
• The Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON) yesterday disclosed that total bank debt owed to telecommunications operators for the provision of the Unstructured Supplementary Service Data (USSD) currently stands at N80.0bn, up from N42.0bn in Dec-2021. He stated that operators might resort to withdrawing their services from defaulting banks.

Ghana

• The Governor of the Bank of Ghana, Dr Ernest Addison, announced that The Bank of Ghana (BoG) had raised the policy rate by 250bps to 24.5%
• According to the 2022 semi-annual Public Interest and Accountability Committee (PIAC) report, 10 International Oil Companies (IOCs) owe Ghana surface rental fee arrears of $2.77mn.
• According to the Public Interest and Accountability Committee (PIAC), There was no disbursement of oil revenues into the District Assembly Common Fund (DACF) for the first half of this year to enable assemblies to continue oil-funded projects across the country.
• The Ministry of Finance failed to make the transfer from the Annual Budget Funding Amount (ABFA), although the projected allocation to the DACF for the entire 2022 is GH¢157,768,890.
• The Government revealed it will incorporate part of the International Monetary Fund (IMF) loan support programme into the 2023 Budget Statement and Economic Policy. 
• Finance Minister Ken Ofori-Atta has said that it will take Ghana about three years to return to the International Capital Market due to the negative impact of downgrades on the economy by international rating agencies.
• According to the United Nations World Investment Report 2022, Foreign direct investment (FDI) to Ghana in 2021 rose 39.0% to $2.6bn mainly due to projects in the extractive industries.
• The Report indicates the construction of an $850 million gold mining facility by American miner Newmont Corporation and the construction of a cement factory by Moroccan company Ciment d’Afrique (CIMAF) for  $436mn contributed to the rise.
• The Chief Executive of the National Petroleum Authority (NPA), Dr Mustapha Abdul-Hamid, revealed that the consumption of Liquefied Petroleum Gas (LPG) as the primary source of cooking fuel rose from 24.5% in 2017 to 36.9%
• According to the President, Nana Addo Dankwa Akufo-Addo, the hospitality sub-sector is now creating two out of every ten jobs in the country,
• The President also revealed that the sub-sector became the third largest contributor to the country’s total productivity, measured by the Gross Domestic Product (GDP), coming after cocoa and oil and gas.

Francophone West Africa (WAEMU)

Ivory Coast

• Vice-President Tiemoko Meyliet stated on 30-Sep that Ivory Coast had raised the fixed farmgate price paid to cocoa farmers by over 9.0% to XOF 900.0 ($1.33)/Kg from XOF 825 for the main crop of the 2022/23 season which began on 01-Oct.
• Orange Ivory Coast CEO Mamadou Bamba stated that the Group had introduced a collaborative 5G laboratory in Abidjan to prepare local businesses and adjacent industries for the country’s 5G rollout scheduled for 2023. Orange has a 5G laboratory portfolio of 15 countries in the EMEA region.

Benin

• The Board of Directors of the African Development Fund, the concessional lending arm of the African Development Bank Group (AfDB), has approved a partial credit guarantee to Benin, which will enable it to raise funds in foreign currency from international investors for expenditures related to financing its United Nations Sustainable Development Goals (SDGs) targets on agriculture and agro-industry, affordable housing, education, health, water and sanitation, and renewable energy.

Burkina Faso

• Army Captain, Ibrahim Traore, announced on 30-Sept, that the army had ousted military leader Paul Henri Damiba, whom himself had ousted President Roch Kabore in Jan-2022.

Senegal

• According to the World Bank, Senegal’s economy is expected to grow by 4.8% this year, down from 6.1% in 2021. The agriculture and mining sectors are expected to contribute the most to growth. The Bank also expects that delayed oil and gas projects, now rescheduled to commence in 2023/24, will boost economic growth to an average of 9.2%.
• The Federation of Saudi Chambers (FSC) and Senegal’s National Union of Chambers of Commerce, Industry and Agriculture on 28-Sept. signed a cooperation agreement to establish a joint Saudi-Senegalese Business Council to enhance trade movement between both countries. Trade volume between Senegal and Saudi Arabia was estimated at $49.3mn in 2021.
• On 27-Sept., the Saudi Fund for Development announced an agreement to provide financing of $63.0mn for the construction of a 12.0km coastal road. It is the most recent cash injection from the fund. It has previously financed 25 projects through 27 loans with a total value of $447.0mn and awarded grants worth $19.0mn to sectors including energy, transportation, health and urban development.

East Africa

Kenya

• According to the Kenya National Bureau of Statistics, the headline inflation rate accelerated for the seventh consecutive month to 9.2% in Sep-2022, from 8.5% the previous month. This is the highest inflation number since Jun-2017, driven by a sharp increase in food, fuel and housing costs. On a monthly basis, consumer prices were up 0.9% compared to a 0.4% rise in Aug-2022.
• According to the IHS Markit, Kenya’s  Purchaser’s Managers Index (PMI) jumped to 51.7 in Sep-2022 from 44.2 in Aug-2022, signalling a renewed and modest improvement in business conditions for the first time in six months.
• The World Bank lowered its economic growth projection for Kenya in 2023 to 5.0% from the previous projection of 5.5%. The reduction results from unfavourable market conditions in the country, such as high inflation rates, food insecurity, fuel price hike and the effects of the ongoing drought.

Rwanda

• InfraCo signed a $1.7mn agreement with Equatorial Power (EP) to scale the company’s innovative mini-grid model in Rwanda. The project will ensure the companies co-develop four solar mini-grids and three agric-processing hubs in southeast Rwanda, providing smaller businesses with access to electricity, thus creating more jobs directly.

Tanzania

• Air Tanzania failed to make the cut in the top 100 carriers in the Skytrax World Airline Awards. The ranking comes at a time when the aviation industry is recovering from the 2020 Covid-19 pandemic that saw the industry record one of the worst losses after passenger flights were grounded to curb the spread of the virus.

Uganda

• The Bank of Uganda increased its benchmark interest rate by 100bps to 10.0% in its Oct-2022 meeting to combat rising inflationary pressures and boost its local currency. Notably, inflation in the country remains above the central bank’s target of 5.0%.
• According to the Uganda Bureau of Statistics, the headline inflation for the month of Sep-22 printed at 10.0%, a 100bps increase from the Aug-2022 print. This is its highest level since Jul-2012, mainly driven by increases in the price of food, education, transport, housing and utilities. On a monthly basis, consumer prices were up 1.5% compared to 1.0% in the prior month.
• According to the IHS Markit, Uganda’s Purchaser’s Managers Index (PMI) climbed to 51.6 in Sep-2022 from 50.5 in Aug-2022. This is the highest growth in private-sector activities in five months amid improving demand conditions in the country.

Southern Africa

South Africa

• According to media reports, several members of the United National Transport Union (UNTU) within Transnet went on strike yesterday, an action declared illegal by the state-owned rail company.
• Earlier this week, the Industrial Development Corporation of South Africa Ltd, IDC, expressed further commitment to boosting South Africa’s energy security.
• The IDC will provide funding to H1. This Black economic empowerment outfit will own a 49.0% stake in new hybrid solar PV and energy storage projects, which are estimated to supply 150MW of dispatchable power to the national grid.
• According to press releases, Shoprite has increased its solar capacity by 82.0% in 12 months, easing pressure on the national electricity grid when South Africa faces one of its worst energy crises.
• Earlier this week, the World Bank warned that South Africa’s aggressive interest rate hikes would hamper economic growth prospects, affecting the country’s ability to respond to socioeconomic challenges.

Angola

• The last three of the ten locomotives acquired by the Angolan government in 2020 from the People’s Republic of China arrived this week, Monday, aiming to boost the Luanda railway (CFL) performance.
• The diesel engines, which are technically named Multiple Diesel Unit (MDU), are composed of four carriages with a capacity to carry 696 passengers and have cost the Angolan state a total of 1.2 billion kwanzas and was bought from the Chinese company China Railway Rolling Stock Corporation (CRRC).
• The secretary of State for Finance and Treasury, Ottoniel dos Santos, announced the Angolan government’s commitment to stimulate the nation’s capital markets to speed up the restructuring and downsizing of the Public Business Sector (SEP).

Zambia

• The Zambian Government plans to spend a total of K167.3bn in 2023, with a portion of K9.1bn allocated to the Farmer Input Support Programme, FISP (up from K5.3bn allocated in the 2022 budget).
• The government plans to spend 39.5% (K66.2bn) of the 2023 budget on the General Public Services function, 10.4% (K17.4bn) on the health sector, and K5.2bn (3.1% of the budget) on construction, maintenance, and rehabilitation of roads.
• Last week, The Federal Government approved the establishment of the Lalumbila Multi-Facility Economic Zone (MFEZ) in the country’s North-Western Province.
• In a bid to raise about $8.0mn capital, Real Estates Investments of Zambia (REIZ) Plc announced its plans to offer over 162 million ordinary shares on Lusaka Securities Exchange (LuSE).
• According to a notice of an extraordinary general meeting posted on the LuSE website by REIZ company secretary and finance manager Louis Pulu, the new ordinary shares will be offered through a renounceable right offering.

Zimbabwe

• According to Business Times, Zimbabwe is set to get over $450.0mn under an International Monetary Fund (IMF) facility, which cushions countries with urgent balance of payments needs and suffering from acute food insecurity and sharp food import shocks in the global economy.
• According to the acting GM, Fidelity Gold Refinery (FGR), Peter Magaramombe, Gold deliveries to FGR increased by 35.0% to 25.66 tonnes in the first nine months of 2022, from 18.97 tonnes achieved in the prior comparative period on incentives.
• According to Business Times, Zimbabwe has allowed farmers to import 250,000 tonnes of top-dressing fertiliser on a duty-free basis to stem a shortage that has haunted the agricultural season, leading to low yields.
• Lands, Agriculture, Fisheries, Water and Rural Development minister Anxious Masuka told Business Times that the cost of fertiliser presents the biggest constraint to increasing production and productivity.
• According to the Minister of Lands, Agriculture, Fisheries, Water and Rural Development, Anxious Masuka, in the recently released State of Preparedness Report, the private sector is targeting to utilise 87,000 hectares of land under strategic crops in the 2022/2023 summer cropping season from around 60 000 hectares used in the prior comparative period.

Central Africa

Democratic Republic of Congo (DRC)

• The Deputy Prime Minister for the Environment and Sustainable Development, in an informal ministerial meeting ahead of the COP27 climate summit, disclosed that the Government of the Democratic Republic of Congo has rejected a request by the U.S. climate envoy, John Kerry, to withdraw some oil blocks put up for auction to protect forests, because it could undermine the country’s development.