November 11, 2022/United Capital Research

Anglophone West Africa
Nigeria

• The Federal Government has increased the compulsory contributions of revenue-generating agencies to the Federation Account to 40.0% from 25.0%. This implies that 40.0% of Internally Generated Revenues (IGRs) by all government agencies are now meant for the Federal Government to execute projects. Notably, the Ministry of Aviation has raised concerns about its inability to raise enough money to meet the new target.
• The Federal Government has disbursed a total of $64.8mn and committed $392.0mn for the development of off-grid electrification projects in the 36 states of the federation and the Federal Capital Territory (FCT). Hence, the total commitment made by the government to steer the projects in the power sector is estimated at $456.8mn.
• The Basel Institute on Governance has rated Nigeria as a high-risk country for Money Laundering and Terrorist Financing (ML/TF). Nigeria was rated 6.77 out of 10, with the country in 17th position out of 128 countries. Notably, countries with high risks of ML/TF often suffer from increased risks of environmental crime.
• The Asset Management Corporation of Nigeria (AMCON) recovered a total of N307.0bn in debts between 2020 and 2021. This represents a 10.0% growth in the recovery performance across various asset classes. Notably, the sum of N146.0bn was recovered in 2020, while in 2021, the sum of N161.0bn was recovered.
• According to the Minister of Budget and National Planning, the Federal Government (FG) is targeting a 6.3% unemployment rate, 7.0% economic growth and 0.3% poverty rate by 2050 as contained in its Nigeria Agenda 2050. The agenda was designed to transform the country into an upper middle-income developing country with a per capita income of $33,000. Notably, the Agenda would be implemented through a series of medium-term plans and annual budgets.
• According to data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) on Tuesday indicated that the total PMS stock of the NNPC dipped to 1,907,244,225 litres on November 7, 2022, indicating a 5.5mn litre d/d decline. The data further revealed that the total days’ sufficiency was 30.84 as of the same date.

Ghana

• Ghana’s annual inflation rate accelerated for the 17th consecutive month to 40.4% in Oct-2022, up from 37.2% in Sep-2022. It was the highest reading since Jul-2001 and well above the central bank’s target band of 6% – 10%, amid a strong depreciation of the cedi during the month. On a monthly basis, consumer prices rose by 2.7%, faster than a 2.0% increase in the previous month.
• The Ghana National Chamber of Commerce and Industries (GNCCI) has called for the repeal of the new Value Added Tax (VAT) regime in the upcoming presentation of the 2023 budget. According to GNCCI, the new VAT regime has positioned businesses in a difficult situation where the prices of goods and services are consequently being increased.
• Fitch Solutions is forecasting a disinflation in 2023, with the expectation that inflation will average about 18.7%, from over 30.0% in 2022. This is due to an expected $3.0bn loan bailout programme from the International Monetary Fund (IMF) and the stabilisation of the cedi.

Francophone West Africa (WAEMU)
Senegal

• The Senegalese government has recently joined the African Petroleum Producers’ Organisation, an 18-member organisation formed 15 years ago in Nigeria. The organisation represents a platform for cooperation and harmonisation of efforts, collaboration, and sharing of knowledge and expertise among oil-producing African states.
• The President of Senegal, Macky Sall, has unveiled a relief plan worth about CFA500.0bn ($762.0mn) to ease the pressure on millions of households struggling with surging inflation. The measures include price caps on fuel & basic goods as well as reductions in school fees and rent payments. Notably, annual consumer price growth is at a multi-decade high of 11.2% as prices of energy and food have surged due to choked supply chain caused by Russia’s invasion of Ukraine and covid-19 lockdowns.

Ivory Coast

• The Export-Import Bank of the US has committed $500.0mn to help American companies invest in Ivory Coast. The financing will be made available for more than two years to the companies, with industries such as energy, transportation, health, security, agriculture, and education prioritised.

East Africa
Kenya

• According to estimates in a medium-term budget plan, Kenya targets a fiscal deficit of 4.3% of GDP in 2023-24 from 5.8% in 2022-23. According to the presentation by the director for macro and fiscal affairs at the National Treasury, expenditure is expected to drop to 21.9% of GDP in the next fiscal year from 25.3% in 2022-23. The plan expects 6.0% economic growth in 2023, compared with about 5.5% this year.  
• Kenya’s parliament has approved the deployment of over 900 troops for the East African Community Regional Force in Eastern Congo to support Congolese forces against armed groups. It is estimated to cost $37.0mn for the first six months of the mission. The funds will be spent on equipment, allowances and operations. A parliament committee report says international financing may be secured for the mission.
• As part of plans to prioritise their economic relationship to boost trade and investment, the Kenyan President and his South African counterpart have agreed to revise their visa restriction policies, creating a new bilateral visa-free regime to take effect from 1-Jan-23. Prior to this deal, they unveiled a Pan-African airline between Kenya Airways and South African Airways.

Rwanda

• According to the National Institute of Statistics, Rwanda’s urban CPI rose 20.1% y/y in Oct-22 from 17.6% y/y in Sept-22.
• Rwanda officially launched a $104.0mn fund, Ireme Invest, to boost private-sector finance for projects to reduce climate change. It plans to offer grants, concessional loans and guarantees to companies to help increase access to green finance. The facility was announced on the sidelines of the COP27 climate summit. The financing for the fund came from the European Investment Bank, Agence Francaise de Developpement, the Swedish government, the Global Climate Partnership Fund, the UK aid agency and Rwanda’s Development Bank.

Tanzania

• The Bank of Tanzania, in its Oct-22 economic review, disclosed that the country’s import of refined white petroleum products grew 90.6% y/y to $3.3bn in Sept-22 from $1.7bn in the prior period. Oil purchases were predominantly from India, United Arab Emirates, Saudi Arabia and China. The Central Bank attributes this to high global crude oil prices.

Southern Africa
South Africa

• According to Google, the Equiano subsea internet cable that landed ashore in Melkbosstrand outside Cape Town earlier this year could cut South Africa’s internet costs by around 20.0%.
• According to South African Finance Minister Enoch Godongwana, some of the loans secured by South Africa as part of an $8.5bn climate finance package will cost a fraction of what it would have paid commercial lenders and will cut the country’s future borrowing costs.
• According to the South African Treasury, the country signed loan agreements with France and Germany worth R10.7bn (€600.0mn) to assist the country in its effort to move away from coal and increase its reliance on cleaner energy.
• For context, each of the European nations has committed R5.4bn (€300.0mn) in concessional financing through the French and German public development banks, the AFD, and KfW, respectively. The loans have been provided directly through the National Treasury department.

Angola

• According to media reports, the Angolan Government has extended an exemption to its environmental protection policy to allow the US oil company Chevron to dump tons of hazardous oil waste directly into ocean shallows near the coast of Cabinda, its northern enclave.
• Earlier this week, the Angola Press Agency (ANGOP) launched a multimedia portal exclusively for the sale of special news products. The new closed system service aims at raising its own revenues through the sale of exclusive content.
• The Angolan Government, through Vice President Esperança da Costa, disclosed on Wednesday that the government had intensified its commitment to the use of solar and wind energy in order to diversify the energy matrix aimed at reducing greenhouse gas emissions by 2030.
• Angola’s Cabinet Council on Tuesday approved the proposal for an Amnesty Law aimed at granting a general pardon for common crimes punishable with a prison sentence of up to ten years, committed between 12 November 2015 and 11 November 2022.

Zambia

• According to the Minister of Agriculture, Michael Katambo, the country currently owes seed companies that supplied the input under the farming input support program- FISP for the 2016/17 and 2017/18 farming seasons about K56.4mn due to budgetary constraints the ministry faced in the programme implementation.
• The Oil Marketing Companies Association of Zambia (OMCAZ) expected fuel pump prices for November 2022 to be maintained or adjusted downwards, but the Energy Regulation Board – ERB recently announced an upward adjustment, perhaps demonstrating the widening expectations gap even between the industry players and the regulator.
• According to the Zambian Government, it has disbursed over K1.0bn to local authorities for the Constituency Development Fund (CDF) targeted at all 156 constituencies countrywide.
• The Ministry of Local Government and Rural Development public relations officer Chila Namaiko disclosed on Tuesday that the disbursed amount translates to K6.4mn per constituency.
• According to media reports, the Japanese government has committed $11.0mn in form of a grant to support rice production in Zambia under a project titled ‘Development of Rice Seeds Production Field and Training Facilities’.
• The Japan ambassador Ryuta Mizuuchi disclosed that the grant would ensure the construction of new training facilities for the Mount Makulu Research Station in Lusaka and the Mansa Agricultural Experiment Station in Luapula.
• The Minister of Finance and National Planning, Dr Situmbeko Musokotwane, revealed that the government released K13.9bn in October to finance public service delivery, out of which K1.4bn was for debt service and other liabilities.

Central Africa
Cameroon

• According to the Autonomous Depreciation Fund, Cameroon’s public debt climbed by 11.0% y/y to print at CFA12.4bn in Q3-2022, compared to the same period last year. This represents a debt-to-GDP ratio of 45.8%. The increase in public debt can be attributed to the disbursements made under the IMF-led 2021-2024 Economic and Financial Programs. Notably, the country received a loan of CFA114.6bn from IMF through the Extended Fund Facility (EFF)and Extended Credit Facility (ECF) in 2022.
• Furthermore, Cameroon’s debts remain sustainable and below the threshold accepted within the CEMAC region (70% of GDP). However, there is a high risk of external debt distress due to low exports and fiscal revenue generation.
• According to the Trade Minister, Cameroon is in talks with the country’s biggest cement maker, Cinemcam, to lift a government ban on exports to its neighbouring country, Chad. The ban was originally imposed in Apr-2022 because there were grey areas regarding the volumes acquired by Chadian operators. This resulted in a shortage on the local market and inflation of the price of cement in Cameroon.