October 14, 2022/United Capital Research

Anglophone West Africa

Nigeria

• The International Monetary Fund (IMF) revised Nigeria’s 2022 economic growth projection to 3.2% from its 3.4% projection in Jul-2022 due to tighter financial and monetary conditions. This weaker outlook reflects lower trading partner growth and a negative shift in the commodity terms of trade. The IMF also downgraded the economic growth projection for Sub-Sahara Africa to 3.6% from 3.8%
• According to Nigerian Upstream Petroleum Regulatory Commission (NUPRC), crude oil production slumped by 3.5% to 937,766bpd in Sep-2022 from 972,395bpd the previous month, 47.9% less than the OPEC+ production quota. The continued decline in crude oil production can be associated with oil thefts, pipeline vandalism and low CAPEX allocation to the sector.
• The Finance Minister, Zainab Ahmed, stated that Nigeria is considering restructuring its debt and extending the repayment period of its credit obligations and has appointed consultants to advise the government as it faces a rising debt-service burden.
• The Federal Government also plans to refinance domestic debt obligations due this year and next, while the country’s N20.0tn ($45.4bn) in outstanding borrowings from the central bank will be bundled into government bonds.
• According to the International Air Transport Association (IATA), air traffic increased by 67.7% y/y in Aug-2022 compared to the same period in 2021. As measured by revenue passenger kilometres, African airlines sustained a 69.5% y/y rise in traffic in Aug-2022.
• According to a statement by the Infrastructure Concession Regulatory Commission (ICRC), The Federal Executive Council (FEC) has approved the establishment of a Maintenance Repair and Overhaul (MRO) centre for the aviation industry. Nigeria is estimated to generate $185.0mn from the centre.

Ghana

• According to Ghana Statistical Service, the country’s annual inflation printed at 37.2% in Sept-2022. Food and core inflation was recorded at 37.8% y/y and 36.8% y/y, respectively. The agency also announced changes to its methods, shifting its reference year from 2018 to 2021, increasing the number of regions covered to 16 (from 10) and adjusting the weights of regions.  

Francophone West Africa

Senegal

• According to the International Monetary Fund’s recently published forecast in its World Economic Outlook report, Senegal’s economy is set to grow by 8.1% in 2023, 3.4ppts higher than the projected 4.7% expansion for 2022. It is projected to be the fastest-growing economy in sub-Saharan Africa next year.
• Notably, the expected 8.1% growth in 2023 is backed by the country’s scheduled production of its first gas from the BP-backed Greater Tortue Ahmeyim field in Q3-2023.
• According to the International Monetary Fund (IMF), Senegal’s medium-term growth outlook appears to be favourable, underpinned by improved oil and gas production, and supported by the overall expectation of a drop in inflation, to its target of 2.0%.
• According to the National Agency of Statistics and Demography, Senegal’s consumer prices rose 11.9% y/y in September, up by 60bps when compared to August’s print of 11.3% y/y.
• According to the Federal Government, the country’s economy is expected to grow 10.1% in 2023, significantly driven by the country’s commencement of oil and gas production. Also, 2023’s budget is expected to be CFA 6.4tn.

Benin

• Earlier this week, Fitch Rating Agency affirmed Benin’s long-term foreign currency debt rating at B+, maintaining a stable outlook for the country.

East Africa

Kenya

• According to the Kenya National Bureau of Statistics, Gross Domestic Product (GDP) rose by 5.2% in Q2-2022, the fourth consecutive quarter of slowing growth, from 6.8% in Q1-2022. This is the weakest economic expansion since Q1-2021, amid disruptions caused by uncertainty around the national election and the prolonged drought. Kenya’s most prominent economic sector, the agricultural sector, contracted for a consecutive straight quarter (-2.1% vs -0.7% in Q1-2022).
• According to Moody’s, the Kenyan government’s plan to cut spending by Sh300.0bn in 2023 will boost investors’ confidence amid tighter external financing conditions. Thus, Moody’s rated the fiscal condition proposal a credit positive, as it will improve fiscal metrics and external borrowing costs
• According to the National Treasury, Chinese lenders fined Kenya Sh1.3bn in H1-2022 for defaulting on interest payments on a railway loan. Kenya had earlier received more than Sh500.0bn from the Export-Import Bank of China to fund the construction of the link between the port city of Mombasa and Naivasha in the Rift Valley.

Rwanda

• According to the National Institute of Statistics of Rwanda, consumer prices climbed to 23.9% in Sep-2022 from 20.4% in Aug-2022. This is the highest inflation rate since Feb-1998, with prices of food and alcoholic beverages soaring by 41.2%. On a monthly basis, headline inflation rose by 3.1% from a 1.1% increase in the previous month.
• The Rwanda Utilities Regulatory Authority has cut gasoline prices by 1.8% to RWF1,580.0/litre from RWF1,609.0/litre. This is to mitigate the adverse impact of high fuel prices on inflation. In addition, diesel prices reduced by 1.2% to RWF1,587.0/ litre.
• The International Monetary Fund (IMF) has agreed to lend Rwanda about $310.0mn under a new tool introduced to help nations bolster their defences against climate change. This makes Rwanda the second nation to get a deal to access the IMF’s new Resilience and Sustainability Trust.

Tanzania

• According to the National Bureau of Statistics Tanzania, consumer prices quickened for the sixth consecutive month to 4.8% y/y in Sep-2022, from 4.6% in Aug-2022. This is the highest rate since Oct-2017, mainly due to rising food prices, non-alcoholic beverages, and transport. On a monthly basis, consumer prices were up by 0.1%, following a 0.4% decrease the previous month.
• Moody’s revised Tanzania’s outlook to Positive from Stable and affirmed its long-term foreign debt rating at B2. The positive revision is due to reduced political risks under the government’s new approach to promoting economic development and engagement with the international community.

Uganda

• According to the Uganda Bureau of Statistics, the economy grew by 4.9% y/y in Q2-2022, following a downwardly revised 5.1% rise in Q1-2022. This is the sixth consecutive quarter of economic expansion, driven by improved momentum in agricultural activities, mining & quarrying and manufacturing. Similarly, the services sector gained some traction driven by trade & repairs, real estate, finance & insurance, and information & communication.
• The Uganda National Oil Co. has received Sh337.3bn as payment for the nation’s stake in the East African Crude Oil Pipeline (EACOP). This represents the Uganda government’s equity participating interest in the EACOP company.
• Nine African countries have agreed to join the World Health Organisation (WHO) in efforts to curb the spread of Ebola and boost the level of preparedness in Uganda. Notably, 20 people out of the 54 cases registered by the country have recovered because they sought early hospital treatment, while 19 have died from the virus.
• The Ugandan government is seeking potential partners in 2023 to develop East Africa’s first nuclear power plant, which may cost $9.0bn as the country moves to boost electricity generation.

Southern Africa

South Africa

• According to Bloomberg reports, Germany has committed €355.0mn ($347.0mn) to South Africa to assist the country’s transition away from coal.
• The South African reserve bank revealed the country’s gross reserves fell to $58.9bn in September from $59.8bn in Aug-2022.
• In addition, the bank revealed the nation’s government bond holdings fell to ZAR 37.5bn in Sept-2022from ZAR 38.4bn in Aug-2022. Accommodation to banks dropped to ZAR 2.2bn from ZAR 3.3bn in Aug-2022.
• Statistic South Africa (SSA) revealed that manufacturing production rose 1.4%y/y in Aug-22 versus a revised +3.9% y/y in Jul-2022.
• According to the Chamber of Commerce and Industry, the nation’s business confidence index rose to 110.9 in Sept-2022from 105.6 in Aug-2022.

Angola

• Banco Nacional de Angola (BNA) Governor, Jose de Lima Massano, revealed the nation’s inflation is expected to slow to 16.0% by the end of the year.
• The Development Bank of Angola (BDA) cut the nation’s benchmark interest rate by 50bps to 19.5%
• According to Bloomberg, Angola plans to export 1.11m b/d of crude in November, Comprising 35 shipments carrying a combined volume of about 33.3mn bbl. October’s revised program of around 31 cargoes came to c. 950k
• On Wednesday in Luanda, the Angolan Reserve Bank (BNA) and the United Nations Development Program (UNDP) signed a memorandum on Financial Inclusion to accelerate the national strategy in this domain.

Zambia

• Mines and energy minister Tom Alweendo and his Zambian counterpart Peter Kapala are expected to sign a memorandum of understanding on cooperation on constructing a natural gas pipeline project from Zambia to Walvis Bay.

Zimbabwe

• Zimbabwe’s President, Emmerson Mnangagwa, stated that the new mining royalty rule starts this month. The rule compels miners to pay half of their royalties in commodities and half in cash. The country plans to build gold, diamonds, platinum and lithium reserves. The central bank would act as custodians of these finished mineral reserves.
• According to media reports, Rwanda will help Zimbabwe launch an $800.0mn project this month, extending electricity to rural areas.

Central Africa

Cameroon

• Following the 4^th meeting for 2022 held by the Monetary Policy Committee (MPC) earlier this week, the Central African States BEAC opted to raise its two benchmark rates.
• The Tender Interest Rate (TIAO), which represents the remuneration it receives for providing liquidity to commercial banks, was maintained at 4.5%. At the same time, the Marginal Lending Rate was also raised by another 50bps, from 6.25% to 6.75%.
• According to data from the National Stats Agency of Cameroon, total export volume from the country to the international markets increased by 5.4% y/y in Q1-2022, driven by improved demand for sawn timber, crude oil, and natural gas, as well as products of the agricultural processing industry.
• According to media reports, the Cameroonian treasury plans to raise CFA155.0bn on the BEAC public securities market in Q4-2022.
• According to the provisional transaction timetable, the Treasury expects CFA70.0bn through five issues of fungible Treasury bills (BTA), with the remaining CFA80.0bn to come from five other issues of fungible Treasury bonds (OTA), which are long-term securities (from 52 weeks to 10 years) usually used to finance infrastructure projects.
• Also, the Ministry of Finance indicated that Cameroon is eyeing maturities of 4, 5, 6, and 7 years for the OTA issues.
• Last week, the World Bank announced its approval of a loan to the tune of $300.0mn (more than CFA200.0bn) to help Cameroon implement local development projects.
• According to the National Stats Agency (INS), prices of food items followed an upward trend throughout August 2022 in the Cameroonian economic capital, Douala, as inflation reached 7.4% in Aug-22,
• Data extracts indicated that the increase was driven mainly by imported food prices, which rose 19.3%, exceeding the average 14.9% increase in prices of all food products on the local market.
• According to data from the Central Bank of Cameroon, SMEs in the country paid 35bps more in interest on bank loans in Q1-2022 than in Q4-2021. The rate climbed from 12.54% to 12.89% over the two periods, despite declining interest rates across other economic segments.

Democratic Republic of Congo

• According to the government, the Democratic Republic of Congo will be placed on the grey list of the Paris-based Financial Action Task Force (FATF), the intergovernmental anti-money laundering body, later this month. This is to improve its financial structure to combat money laundering and the financing of terrorism.