December 2, 2022/United Capital Research

Anglophone West Africa

Nigeria

• According to the Debt Management Office (DMO), the Federal Government has borrowed N6.3tn from the CBN through the Ways and Means Advances in the first ten (10) months of 2022, increasing total borrowings from the CBN by 36.1% y/y to N23.8tn. This figure is excluded from the country’s public debt stock which stood at N42.8tn as of Jun-2022.
• According to the National Bureau of Statistics (NBS), N2.0tn worth of indirect taxes were paid in the first nine months, a 16.6% y/y increase.
• According to Nigeria’s Minister of State for Petroleum Products, Nigeria is expected to cease the importation of petroleum products in Q3-2023. This, he says, is possible due to the ongoing refurbishment of the Port Harcourt, Warri, and Kaduna refineries. All refineries are expected to be operational by Dec-2023.
• Additionally, the Minister of State said that Nigeria is expected to meet her OPEC quota by May-2023.
• According to the Nigerian Bureau of Statistics Price watch, the average retail price of Automotive Gas Oil (Diesel) paid by consumers in Oct-2022 was N801.09/ltr., a 215.3% y/y increase from corresponding month of 2021. Similarly, Premium Motor Spirit (Petrol) was N195.29/ltr. (+17.9% y/y), and the average retail price for refilling a 5.0kg cylinder of Liquified Petroleum Gas (cooking gas) was N4,474.48 (+70.6% y/y).
• According to the CBN’s Monthly Economic Report, it has injected $11.2bn into the economy to stabilise the value of the Naira from Jan-2022 to Jul-2022.

Ghana

• In its final meeting of 2022, the Bank of Ghana (BoG) increased its Monetary Policy Rate (MPR) by 250bps to 27.0%. The committee expects inflation to peak in Q1-2023, then moderate to 25.0% in Dec-2023.
• According to a statement on 29-Nov., Moody’s Investors Service has downgraded Ghana’s credit rating by two levels to Ca. The downgrade follows plans in Ghana’s proposed 2023 budget to restructure both local and foreign debts.

Francophone West Africa

Ivory Coast

• According to Bloomberg reports, Ivorian farmers sent 118,871 tons of cocoa to ports last week, bringing total arrivals since the start of Q4-2022 to 707,200 tons.
• The Federal Government of Ivory Coast revealed it had completed construction of a second container terminal at its main port in Abidjan, paving the way for it to become a regional shipping hub.
• Port authorities said the project cost about 596.0bn CFA francs ($953.0mn) and was 85% financed by China’s Eximbank and 15% by the Ivorian state.
• Director General of Sucrerie d’Afrique Cote d’Ivoire, also known as Sucaf-Cl, said that Sugar harvest in Ivory Coast is expected to increase by 11.0% by 2025 after sugar production hit record levels of 112,325 metric tons (+4.0% y/y) this year.

Benin

• The Republic of Benin and Eni signed a cooperation agreement for a joint initiative for the agro-industrial chain and Eni’s Biorefining. The agreement will focus on oil crops for the biorefining system that will not compete with the food chain.

East Africa

Kenya

• According to the Kenya National Bureau of Statistics, the country’s inflation unexpectedly slowed for the first time in eight months to 9.5% in Nov-2022 from 9.6% in Oct-2022. Slowing prices were supported by the deceleration in prices of food and non-alcoholic beverages. On a monthly basis, consumer prices increased by 0.3%, down from 0.9% in the previous month. Slower-than-forecast inflation may ease pressure on the central bank to hike interest rates further at its next MPC meeting.
• Kenya plans to waive import duty on 900,000 tonnes of corn between Feb-Apr to allow the importation of 10.0mn bags of white corn to fill the national deficit and prevent an impending crisis.

Rwanda

• China has relieved Rwanda of a $7.1mn interest-free loan initially given to build the 6.7km Masaka-Kabuga Road under the Kigali urban road upgrade project. The move is part of the Chinese government’s decision to write off outstanding interest-free loans following the agreement on economic and technical cooperation between the two nations.

Tanzania

• The Bank of Tanzania’s Monetary Policy Committee (MPC) has decided to continue its monetary policy accommodation plan in Dec-2022. The decision was made upon assessing the recent policy implementations and economic performances, given the spillover effects of global supply-side shocks on inflation and output. Notably, the policy decision is intended to align inflation expectations with its target while safeguarding the growth of economic activities.
• The European Commission has granted €60,000.0 in humanitarian aid in response to a cholera outbreak in the Northern Tanzania districts of Uvinza and Tanganyika. There have been 181 verified and suspected cases.

Uganda

• According to the Uganda Bureau of Statistics, Uganda’s consumer prices slowed to 10.6% y/y in Nov-2022 from 10.7% in Oct. This is the first decline in the country’s headline inflation rate since Jan-2022. However, the decline might not be enough to persuade the central bank to pause rate hikes.
• Uganda experienced another power blackout that affected the entire country due to intensified cases of vandalism of power facilities. This is the umpteenth time the country was experiencing a nationwide power blackout.

Southern Africa

South Africa

• According to the South Africa National Treasury, South Africa’s budget deficit widened more than economists expected in Oct-2022, widening to ZAR40.6bn (estimate -ZAR37.5bn) from -ZAR3.3bm in Sep-2022.
• According to the South African Revenue Service, South Africa’s trade moved to a deficit in Oct-2022, despite economists’ expectation for a surplus. Trade moved to deficit ZAR4.3bn (estimate +ZAR14.7bn) from the revised +ZAR26.2bn in Sep-2022.
• According to Statistics South Africa, South Africa’s unemployment rate fell more than economists expected in Q3-2022, falling to 32.9% (estimate 33.5%) from 33.9% in Q2-2022. In addition, the number of people employed by manufacturers rose by 123,000 to 1.6mn in Q3-2022.
• According to the South African Reserve Bank (SARB), South Africa’s M3 money supply rose more than economists expected in Oct-2022, climbing 9.8% y/y (estimate +8.8%) vs +8.8% in Sep-2022.
• South Africa’s long-term issuer default rating was affirmed by Fitch at BB-, with outlook remaining stable.
• According to Bloomberg, confidence among South Africa’s agricultural businesses fell to the lowest level since the height of Covid-19 restrictions as factors including power cuts, rising protectionism in some export markets, and animal disease outbreaks weigh on sentiment. 
• According to Zahabia Gupta, a director for sovereign and international public finance ratings at S&P Global, South Africa’s government debt is expected to increase from 67.0% of gross domestic product this year as a portion of Eskom’s debt is transferred to the state’s balance sheet.
• South Africa’s Rand touched the lowest in more than a week after a panel said that President Cyril Ramaphosa may have violated the constitution, a finding that would weaken his chances of winning a second term.
• The currency fell as much as 1.7% to ZAR17.3 /$ on Wednesday, which apparently is recorded to be the weakest weekly performance among 23 emerging-market peers tracked by Bloomberg.
• Statistics South Africa revealed that South Africa’s electricity production fell 3.8% y/y in Oct-2022 vs -8.2% in Sep-2022.
• According to the Automotive Business Council, South Africa’s new vehicle sales rose more than economists expected in November, climbing 18.2% y/y (estimate +10.5%).
• According to Bloomberg, Cellulant Ltd., a Kenyan payment-services provider, is starting a South African business after months of testing the market and is looking to wrap up fundraising for further expansion to the Middle East and the UK.
• According to Absa and the Bureau for Economic Research, South Africa’s manufacturing PMI rose more than economists expected in Nov-2022, climbing to 52.6pts (estimate 50.5pts) in November from 50.0pts in Oct-2022.

Angola

• According to Bloomberg, Angola just recently received €238m ECA-backed financing for new Infrastructure. The financing consists of two-term loans for separate projects.
• The first loan of roughly €142.0mn is for a new bio-veterinary centre for the production and development of animal vaccines, while the second loan of about €96.0mn is for renovating a section of a national road.
• Exxon Mobil Corp., which won the right to exploit oil fields offshore Angola, is working with the African nation’s oil regulator to make exploring for the fuel more attractive after technological challenges delayed the project. 
• According to a final schedule seen by Bloomberg, Angola plans to increase crude exports to
  1.12mbpd in Jan-2023, the highest for any month since Aug-2021.
• The Monetary policy committee of Angola opted to leave its benchmark interest rate unchanged at 19.5% in Nov-2022, supported by the recent y/y downward trajectory of inflation in the country.

Zambia

• According to the central bank governor of Africa’s first pandemic-era sovereign defaulter, the depth of the haircuts Zambia is asking creditors to accept is proving an obstacle in debt restructuring talks.
• The southern African nation needs $8.4bn in debt relief to stay on track with its International Monetary Fund program that ends in 2025.
• According to Secretary to Treasury Felix Nkulukusa in a statement from the Ministry of Finance
  and National Planning, Finalization of regulations creates credible opportunities for raising financing through green bonds for climate change projects and green growth.
• As part of the provisions, interest income earned on green bonds with at least three-year maturity will be exempt from withholding tax.

Zimbabwe

• According to the Ministry of Lands, Zimbabwe intends to boost its tobacco output by 42.0% to 300.0mn kilograms by 2025 by increasing planting. Furthermore, the government plans to start a forestation program, which essentially is poised to address the issue of tobacco farmers cutting down trees for fuel for curing.
• According to Zimbabwe National Statistics Agency, Zimbabwe’s consumer prices rose 255.0% y/y in Nov-2022.
• According to the Zimbabwe National Statistics Agency, the country’s trade deficit narrowed to $212.0mn in Sep-2022, down by 20.1% vs its print of $265.4mn in Aug-2022.
• According to Bloomberg, the Zambezi River Authority has ordered the suspension of electricity generation on the Kariba Dam, which supplies energy to Zimbabwe’s power utility, until January due to a water shortage. 

 Central Africa

Democratic Republic of Congo

• According to the Congolese Minister of Hydrocarbons, Didier Budimbu Ntubuanga, Angola and the DRC are still on track to complete the joint oil exploration deal. The proposed Public Private Partnership also involves Sonangol, Angola’s state-owned oil company and Chevron.
• Trafigura, a Swiss commodity trader, has negotiated a $600mn syndicated financing facility with the Eastern and Southern Trade and Development Bank to develop cobalt and copper mines in the DRC.
• In addition, the facility would be employed to complete a processing plant in Kolwezi and expand its Etoile mine and processing plant in Lubumbashi.
• Mats Eriksson, President of Sandvik Mining and Rock Solutions, revealed the company had received a PPE order worth SEK210.0mn from JCHX Mining Management, the Chinese mining service provider. The equipment will be employed in the Kamoa-Kakula copper mine and the Kamoya copper and cobalt mine located in the DRC.