November 4, 2022/United Capital Research

Anglophone West Africa

Nigeria

• The Minister of Agriculture and Rural Development, Mahmood Abubakar, disclosed that the Federal Government received $249.0mn, $244.0mn from the African Development Bank and $5.0mn from the International Fund for Agricultural Development for flood impact mitigation and food production.
• In addition, he disclosed that the construction of mini-earth dams has also commenced, and the FG is currently restocking the country’s strategic food reserves with 200,000 MT of assorted commodities.
• President Buhari, represented by the Vice President, disclosed at the 2022 Nigeria Mining week that the Federal government has appointed a transaction adviser for the concession of the Ajaokuta Steel Company and the Nigerian Iron Ore Mining Company.
• The World Bank in its most recent Commodity Markets Outlook report warned that the depreciation of most currencies of developing economies against the US Dollar, including the Naira, could deepen the food and energy crisis they already face. 
• United Capital Infrastructure Fund (UCIF), a N150.0 bn close-ended fund, announced its maiden investment in a brownfield lead production and exporting plant, with an initial capacity of 7,000 MT. The investment was made through a senior secured six-year medium-term refinancing facility provided to BPL Nigeria Limited (BPL). The project will be implemented in three phases, with expansion of its 7,000 MT initial capacity to 28,000 MT ultimately.
• Oil production data obtained from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) revealed that Nigeria’s aggregate oil production in Q3-2022 dropped by 1.2mn barrels in July, 3.4mn barrels in August, and 2.0mn barrels in September.
• Railway transportation data from the National Bureau of Statistics (NBS) has revealed that the number of train passengers in Q2-2022 was 422,393, down from 953,099 in Q1-2022. 
• The data also showed that the number of cargo for Q2-2022 was zero, compared to Q1-2022 when the total cargo transported through the railway system was 32,139 tons. 
• The Canadian Trade Commissioner to Nigeria, Temitayo Dada, has revealed at the Canada-Nigeria Trade Mission’s Event 2022 Agenda that Nigeria is Canada’s largest trading partner in Africa, with $2.7bn in bilateral merchandise trade.

Ghana

• Ghanaian President, Nana Akufo-Addo has ruled out losses for bond investors as a result of negotiations with the International Monetary Fund for a $3.0bn bailout. He criticised speculation that investors in the country’s government Treasury bills would lose money as a result of the ongoing negotiations. He attributed the renewed selling of the cedi to this speculation.
• The S&P Global Purchasing Managers’ Index (PMI) for Ghana’s private sector in Oct-2022 fell to 44.0 from 45.6 in Sept-2022, and from 51.0 in Oct-2021. It is its lowest reading since Apr-2020. Similarly, output fell to 40.3 from 41.7 in Sept-2022, a 10^th month of contraction.
• According to loading programs seen by Bloomberg, Ghana plans to lift exports of Jubilee crude to 92.0kbpd in Dec-2022 from 63.0kbpd in Nov-2022. In addition, Sankofa loadings are to drop to 31.0kbpd in Dec-2022 from 63.0kbpd in Nov-2022.

Francophone West Africa (WAEMU)

Ivory Coast

• The President of the African Development Bank Group (AfDB), Dr Akinwunmi Adesina, revealed at the virtual Africa Investment Forum that the bank secured $15.6bn in investment interest for the construction of the Lagos-Abidjan Highway.
• Sugar output in Ivory Coast rose 4.0% during the 2021-22 season compared to the prior season, according to figures published by the West African nation’s Sucrerie d’Afrique Cote d’Ivoire (Sucaf-CI.). In the 2020-21 season, the company (partly controlled by French sugar giant Somdiaa SA) produced 107,801 tons of sugar.
• Sucaf-CI has expressed concerns about future production due to high fertiliser prices, which have risen 30.0%. The company has asked for the government’s help to slash fertiliser prices and a break from value-added tax.
• Ivory Coast’s Minister of Agriculture Adjoumani Kouassi Kobenan said the government would support Sucaf-CI.
• According to Bloomberg reports, Ivory Coast farmers sent 91,443 tons of cocoa to ports in the past week.

East Africa

Kenya

• According to Ndii, Chairman of the President’s Council of Economic Advisors, the FG’s plan to raise S900.0mn in external commercial financing is still in process.
• According to a National Treasury report, the Kenyan government has guaranteed part ($525.0mn) of the $841.6 million loan to Kenya Airways from the Export-Import Bank of USA.
• According to Kenya’s National Bureau of Statistics, the country’s consumer price index accelerated 9.6% y/y in October, 60bps higher than the overall market expectation of 9.0% y/y, and 40bps higher than September’s print of 9.2% y/y.
• According to President William Ruto, the Kenyan government will collaborate with development partners and the private sector to raise an additional 10.0bn shillings to ensure no part of the country is unfairly affected by drought.
• The Government of Kenya has set out plans to invest a total of $3.2bn in the power sector in the medium term.
• Kenya currently has an installed capacity of 3,081MW, out of which 949MW is geothermal energy and 838MW is hydropower. The Government is working to transition to a 100.0% renewable energy grid, from about 90.0% currently.
• According to Stanbic Bank and S&P Global, Purchasing Managers’ Index (PMI) for Kenya’s economy declined in October to settle at 50.2pts, down by 5.7% vs a print of 51.7pts in the same period last year.

Rwanda

• Fitch Ratings Agency affirmed Rwanda’s long-term foreign currency debt rating at B+, with the outlook remaining negative.
• According to Rwanda’s statistics agency, the country’s producer inflation rate accelerated from 12.3% y/y in Aug-22 to 13.1% y/y in Sep-22. Furthermore, local prices saw a 9.2% y/y rise in same period with export prices on the other hand climbing 23.3% y/y.

Uganda

• According to the Ugandan Bureau of Statistics, Uganda’s consumer prices in October climbed 10.7% y/y, 70bps higher than September’s 10.0% y/y climb.
• Earlier in the week, the Federal Government asked lawmakers to approve the plan to borrow $464.1mn from Standard Chartered Bank Uganda. The funds is to be allocated toward infrastructure development of the nation.
• According to Uganda’s Minister for Energy, Ruth Ssentamu, at the Adipec conference in Abu Dhabi, China is “always ready” to fund energy plans.
• Uganda is working with other countries like Tanzania to raise funds for the East Africa pipeline project.
• According to the Chief Executive Officer of Standard Bank Group Ltd, Sim Tshabalala, the Group will decide soon on whether to help finance a controversial $4.0bn oil pipeline from Uganda to Tanzania.
• According to Stanbic Bank and S&P Global, Purchasing Managers’ Index (PMI) for Uganda’s economy declined in October to settle at 50.0pts, down by 8.5% vs print of 54.6pts in the same period last year.

Tanzania

• According to Bloomberg, hydropower generation has slumped in Tanzania, owing to a prolonged drought period, which reduced water levels in rivers and reservoirs, forcing the nation to increase its reliance on gas-fired electricity plants.
• According to the state utility Tanzania Electric Supply Co. or Tanesco, combined output from the East African nation’s four hydropower plants fell 86.0% to 34.0MW. Furthermore, about 185MW will be added from gas before the end of the year
• According to the President of Tanzania during the announcement of the 2022 census result, the nation’s population grew by more than a third amid concerns that the East African nation’s high birth rate would make it more difficult for it to provide basic social services. For context, Tanzania’s population increased to 61.7mn in 2022, from 44.9mn in 2012.
• According to state broadcaster CCTV, citing Chinese President Xi Jinping, China is willing to expand imports from Tanzania and support Chinese companies to invest in the African country.

Southern Africa

South Africa

• According to Absa and the Bureau for Economic Research, South Africa’s manufacturing Purchasing Managers’ Index (PMI) for the economy climbed in October to settle at 50.0pts, 4.2% higher than the overall market estimate of 48.0pts, and 3.7% higher than September’s print of 48.2pts.According to Thiago Almeida, Sector lead for power and infrastructure at Nedbank Group Ltd.’s corporate and investment banking unit, the country is facing a 33.0bn rand ($1.8 billion) annual investment deficit in its water facilities, as the water crisis resurfaces, posing another threat to South Africa’s creaking infrastructure.
• According to the Automotive Business Council, South Africa’s new vehicle sales rose more than economists expected in October, climbing 11.4% y/y (estimate +10.5%).
• Earlier in the week, four South African labor unions took a step toward joining a strike over the government’s refusal to raise their pay to civil servants by more than 3.0%.
• According to a statement from the country’s Apex bank, the Bank has begun publishing South African Rand Overnight Index Average, known as Zaronia, for observation by financial-market participants.
• In addition, Zaronia reflects the interest rate at which rand-denominated overnight wholesale funds are obtained by commercial banks.
• According to a document from South Africa’s Department of Agriculture, South Africa has approved imports of HB4 wheat and soybeans, drought-tolerant strains developed by Argentine biotech Bioceres, for food and feed.
• According to Statistics South Africa, the country’s Electricity production fell 8.2% in September vs 2.0% in August. In the same period, electricity consumption declined 7.5% vs 1.0% in August.
• 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 a schedule seen by Bloomberg, Angola plans to load 1.1m b/d of crude in December, vs the revised 1.05m b/d in November.
• Sonadrill, Seadrill’s joint venture with an affiliate of Sonangol, has secured a 12-well extension in Angola for the Libongos drillship. The total contract value for the firm’s portion of the contract is approximately $327.0mn, inclusive of additional services.
• According to the Ministry of Finance’s debt management unit, the Angolan economy on average is seen to expand more than 3.0% through 2024 (3.4% in 2023, and 2.9% in 2024). Oil production is expected to increase to 1.2mbpd on average in 2023 from 1.1m this year.

Zambia

• According to Stanbic Bank and S&P Global, Purchasing Managers’ Index (PMI) for Zambia’s whole economy declined in October to settle at 49pts, down by 3.0% vs print of 50.5pts in the same period last year.

Zimbabwe

• According to the Zimbabwean National Statistics Agency, the country’s consumer prices rose 268.8% y/y in October vs +280.4% in September.
• Zimbabwe’s largest and oldest food manufacturer, National Foods Holdings Ltd., is set to announce plans next week Monday to list with immediate effect on a stock exchange that trades exclusively in US dollars, marking an end to the company’s 52-year listing on Harare’s main exchange, which trades in local currency.
• According to the country’s National Statistical Agency, the country’s deficit widens from $178.0mn recorded in July, to $202.0mn in August, up by 13.5%. The value of total exports declined 10.0% to $493.6mn, while imports dropped 3.6% to $701.8mn in August.
• Zimbabwe follows the footstep of the Nigerian Government as it pursues plans for its own central bank digital currency and reiterated its commitment to execute despite the lackluster interest shown in Nigeria toward the eNaira.
• Caledonian purchased Motapa Mining Company UK, the parent company of a Zimbabwe subsidiary that holds a registered mining lease over the Motapa gold exploration
  property in Southern Zimbabwe.
• According to the chairman of the Zimbabwe Coal Producers Association, the country recently shipped its first coal to China, exporting 20,000 tons as part of a trial run to a customer in the cement industry.

Central Africa

Cameroon

• According to data published by National Statistics Institute, Douala’s inflation rate accelerated to 6.6% y/y in August. Food & non-alcoholic beverages prices were +14.6% y/y, +0.2% m/m while Housing, water and energy prices were +0.6% y/y and unchanged on the month finally, Transport prices were +3.2% y/y and declined 0.2% m/m.
• The recently released industrial producer price index (IPPI) by the National Statistics Institute revealed that factory gate prices in Cameroon increased by 16.0% y/y in Q2 2022 (from 15.0% y/y in Q1-2022),
• Data from the National Statistics Institute revealed imported food inflation moderated in Yaoundé slightly to 18.6% y/y at the end of Sep-2022, a m/m decline from the 19.3% y/y increase recorded in Aug-2022.
• PM Joseph Dion Ngute and the Minister of Finance, Louis Paul Motaze, revealed that Cameroon plans to set up a special allocation account to rebuild areas identified as economically distressed (Far North, Northwest, and Southwest), and the initiative would be included in the 2023 Finance Act.
• Cameroon’s debt recovery company SRC announced it is implementing a strategy to recover CFA34.0bn in bad debts from the Union Bank of Cameroon (UBC).

Gabon

• In line with Gabon’s Minister of Water, Forests, Sea, and Environment’s statement highlighting that the country intended to exploit its forests sustainably to generate income, the move appears to have become successful.  According to media reports, the nation’s October issuance of carbon credits is projected to be the largest on record, potentially raising more than US$2.0bn.