October 21, 2022/United Capital Research

Anglophone West Africa

Nigeria

• According to the National Bureau of Statistics (NBS) inflation report for Sept-22, the headline inflation climbed 27bps to settle at 20.77% y/y in Sept-22, from August’s 20.52%. On a m/m basis, the headline CPI rose by 1.4%, 41bps lower than its 1.8% climb in August.
• Across the sub-indices, food inflation expanded 22bps to print at 23.34% y/y in Sept-22, from 23.12% y/y in Aug-22. In tandem, the core inflation sub-index rose 40bps to print at 17.60% in Sept-22, from 17.20% as of Aug-22.
• Moody’s Investors Service has placed on review for downgrade the long-term deposit ratings, as well as the long-term issuer and senior unsecured debt ratings, where applicable, for 9 Nigerian Banks. They include all tier-1 banks, Fidelity Bank, FCMB, Union Bank, and Sterling Bank.
• The Nigeria Liquefied and Natural Gas (NLNG) declared a force majeure on product supplies from its production facilities on Bonny Island, owing to high flood water levels in their operational areas, leading to a shut-in of gas production thus causing a significant disruption of gas supply to NLNG.
• At the Manufacturers Association of Nigeria Export Promotion Group’s annual conference, the Minister of Trade and Investment, Niyi Adebayo, indicated a willingness to liaise with the CBN to create a separate FX window for manufacturers in Nigeria. This is in line with the plea by the members of the association for some relief from the dollar shortage in Nigeria.

Ghana

• According to data from Bloomberg, Ghana’s Cedi has slumped to become the world’s worst-performing currency this year (with YTD at c.-45.0% as of Monday) as investors continued to squeeze foreign capital out the West African country before a deal with the International Monetary Fund (IMF).
• According to data extracts from Ghana’s Statistical Agency, the country’s Producer Price Inflation climbed 5.2% in Sept-22 to print at 45.6% y/y from 39.7% /y in Aug-22, driven by the manufacturing and mining sectors.
• According to the CEO of Ghana’s National Petroleum Corp. the country’s delayed liquefied natural gas imports terminal is likely to be completed next year as talks continue with Shell Plc for the supply of fuel for the project.

Francophone West Africa (WAEMU)

Ivory Coast

• According to data published by the Abidjan-based statistics agency, Ivory Coast’s inflation rate rose to 6.3% y/y in September from 6.2% y/y in August.
• According to Bloomberg reports, Ivory Coast farmers sent 84,692 tons of cocoa to ports last week.
• Data extracts from the exporters’ association GEPEX revealed Ivory Coast’s cocoa grind was up 10.0% y/y in September to 55,000 tonnes. The total grind for the 2021/22 season stood at 643,000 tonnes of beans by the end of September, up 13.8% from 565,000 tonnes in the previous season.
• The Commercial Director of the Cotton Company of Ivory Coast, Kassoum Kone, revealed that due to the acute dry weather and ravaging insect infestations, Ivory Coast cotton harvest for the current Nov-22 to Oct-23 season would drop by at least 20%.

Senegal

• According to the U.S. Department of Agriculture (USDA), Senegal’s rice imports are forecast to rise by 12.0% in the current calendar year due to large purchases of Indian rice. Imports will increase to 1.4mn metric tons from 1.3mn in the previous year, the USDA said in its October grain world markets and trade report. Imports are expected to fall to 1.1mn tons in 2023; according to the World Bank.
• Senegal’s rice production is forecast to rise by 9.0% to 1.4mn tons in the marketing year beginning Oct-22 through Sept-23, which is expected to lower imports, the USDA said in its recent Senegal grain and feed report. Production is expected to rise compared with the prior year due to increased access to certified seeds, fertilisers, and agricultural equipment.
• According to media reports, Senegal, like the Democratic Republic of Congo, has discovered oil and gas reserves, raising hopes of future riches and industrialisation.
• In Senegal, a new offshore gas terminal located in the Atlantic Ocean about 10.0km off Saint-Louis is beginning to have adverse ecological effects, upsetting fishermen who lament the loss of an area “rich in fish”.
• In a particularly tense global context, oil companies in Senegal must deal with a debt of 375.0bn CFA francs owed by the State. A debt which, if it is not settled, risks plunging the country into a lack of supply of petroleum products.               

East Africa

Kenya

• According to the Central Bank of Kenya’s (CBK) annual report, its net surplus rose to KSh76.9bn in the year ending Jun-22, compared to KSh37.0bn the previous year. The Bank attributed this surplus to an unrealized foreign exchange gain due to the strengthening of the US Dollar against the Kenyan Shilling.
• The Bank’s consolidated assets decreased 0.7% y/y to KSh1.4tn, while its liabilities decreased 4.9% y/y to KSh1.2tn.
• According to the new government’s Transportation Secretary, Kenya intends to request for an extension of the repayment period on loans from its Chinese investors to 50yrs. According to the National Treasury external debt register, Kenya owes China’s Export-Import Bank $5.0bn.

Rwanda

• The Minister of Infrastructure disclosed on 18-Oct before the Chamber of Deputies that the Government has secured RwF500.0bn to support its universal electrification efforts, with a focus on districts with low energy access levels. The Government aims to achieve universal access to electricity by 2024, under its first phase of national strategy for transformation running from 2017-2024.
• According to the Director-General of Agriculture Value Chain Management and Trade at the Ministry of Agriculture, Rwanda is set to increase the scale of land on which rice is grown by 5,000.0ha to intensify production. According to the Ministry, Rwanda currently produces rice locally at 47.0% of what is required for domestic consumption and depends on imports.

Tanzania

• According to the Bank of Tanzania monthly economic review for Sept-22, the country’s current account recorded a US$4.4bn deficit in the year ending, up from $1.8bn registered over the corresponding period last year.
• In addition, Imports of goods and services amounted to $15.0bn in the period under review from $10.3bn in Aug-21. The exports of goods and services amounted to $11.3bn., up from $9.0bn. Thus, the Balance of Payments was a deficit of $418.2mn compared with a surplus of $839.4mn in the corresponding period a year earlier.

Southern Africa

South Africa

• According to Statistics South Africa, headline inflation decelerated for a second straight month to 7.5% in Sept-22 from 7.6% in Aug-22, matching market expectations but still above the upper limit of the South African Reserve Bank’s target range. On a monthly basis, consumer prices edged up by 0.1%, following a 0.2% increase in the prior month.
• According to the Reserve Bank Governor, South African borrowing costs will only be lowered when inflation retreat towards the midpoint of the central bank’s target range and the rate is sustained. The bank officially targets an inflation rate in a band of 3.0% to 6.0%. Although prices have been declining, it is unlikely to sway the Central Bank from raising interest rates in its Nov-22 meeting.
• The South Africa’s cabinet has endorsed an investment plan to help the country transition away from the use of coal, a key step in securing the $8.5bn in climate finance on offer from the world’s richest nations. The plan envisages the closure and re-purposing of coal-fired power plants so that additional renewable energy can be produced.
• According to Statistics South Africa, retail sales rose by 2.0% y/y in Aug-22, after an upwardly revised 8.9% jump the previous month. On a monthly basis, retail trade fell by 1.8% in Aug-22, following a 0.1% decrease in the prior month.
• According to Citi, South Africa’s economy is likely in a technical recession as intensified power cuts and heightened uncertainty caused by Russia’s war with Ukraine rippled through the global financial markets.

Angola

• According to the Banco Nacional de Angola Governor, headline inflation is expected to slow to 16.0% by end of the year, revising downwards his previous 18.0% estimate for the end of 2022. Inflation is expected to fall below 10.0% in 2023 as a stronger Kwanza against the dollar will help ease inflation. The bank also forecasts the Angolan economy to expand by 3.0% – 3.5% in 2022, the fastest pace in 10 years.
• According to the Finance Minister, Angola is taking advantage of higher oil prices to accelerate its debt-reduction plans and smooth out repayments to China, its largest creditor. The country currently owes China $18.0bn, i.e. 40.0% of its external debt after a total of $1.3bn loans have been settled this year. Repayments are expected to improve next year, and the country’s debt to GDP is projected to fall to about 61.0% in 2023, down from 66.0% in 2022 and more than 100.0% in 2020.

 
Zambia

• Airtel Networks Zambia purchased 60 MHz of additional spectrum spread across the 800 MHz and 2,600 MHz bands from the Zambia Information and Communications Technology Authority. The additional spectrum is expected to support network expansion for both mobile data and fixed wireless home broadband capability, including the 5G rollout.
• The Zambian government plans to commence the re-issue of mining licenses following the Cabinet’s approval to reopen the relevant departments at the Ministry of Mines and Minerals Development.

Zimbabwe

• The Zimbabwean government plans to maintain its benchmark interest rate at 200.0%, the world’s highest interest, into next year as it prioritises economic stability ahead of high growth rates. The country had earlier hiked its rate to 200.0% in Jun-22 to help rein in inflation and support the local currency. The Central bank cited that it will only lower rates if a m/m decline in inflation numbers is sustained for 3-4 months.
• Zimbabwe plans to fund the bulk of its budget deficits from domestic sources until 2025 as it continues to be locked out of international debt markets. Debt distress and the accumulation of external debt arrears have worsened the country’s inability to access funding from the international financial and capital markets.

Central Africa

Democratic Republic of Congo (DRC)

• According to Bloomberg reports, Uganda and DR Congo have struck a deal to construct a significant transmission power line to boost trade and get through the security challenges they are currently facing.
• According to Bloomberg reports, the Emirati Council of Ministers on Oct. 10 ratified the air services agreement with the Democratic Republic of the Congo, signed on 7-Apr-15..

Cameroon

• According to a report from the country’s Trade Ministry, Gas carriers are stranded in Cameroonian waters and are prevented from delivering gas to the country due to administrative and currency issues.
• The Bank of Central African States (BEAC) in its Q4-22 business climate forecast, expects a significant increase in fishing activity in the fourth quarter of 2022, as a result of the resumption of fish catches after the biological rest imposed during the third quarter.
• The Cameroonian Civil Aviation Authority (CCAA) in an official document sent on 12-Oct-22 to the Safety of Air Navigation in Africa and Madagascar (ASECNA) approved a new airline (ZeJet) in the air transport sector.
• According to a report from the Road Revenue Security Program (PSRR), the Cameroonian Government received a total of CFA6.4bn from the operation of toll booths at the end of Sep-22, up by16.4% vs CFA5.5bn collected in the same period in 2021.