May 5, 2023/United Capital
Anglophone West Africa
Nigeria
- The Managing Director of the International Monetary Fund, Kristalina Georgieva, cautioned about the unforeseeable consequences of the retail central bank digital currencies.
- The Courier and Logistics Regulatory Department (CLRD) of the Nigerian Postal Service (NIPOST) has carried out raids on unlicensed courier operators, including Express, Delivery, Dispatch and Logistics operators in Lagos State.
- The Minister of State, Budget and National Planning, Clem Agba, has disclosed that the Federal Government plans to include an allocation for geospatial data in the budgets of government agencies.
- The Ministry of Communications and Digital Economy said the digital economy had been excluded from the planned 5.0% excise duty approved by the Federal Government.
- According to the International Monetary Fund (IMF), Nigeria may lose an estimated $10.0bn of Foreign Direct Investment (FDI) and official development assistance inflows due to geopolitical tensions. In the long run, the reduction in FDI could also hinder much-needed technology transfer. IMF further noted that if geopolitical tensions were to escalate, the country could be hit by higher import prices or even lose access to key export markets.
- The Organised Private Sector of Nigeria, comprising of the Manufacturers Association of Nigeria (MAN), the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and the Nigeria Employers’ Consultative Association (NECA), have rejected the recently announced increase in excise tax.
- According to the Federation Account Allocation Committee (FAAC) Disbursement reports published by the National Bureau of Statistics (NBS), the Federal Government deducted c.N78.0bn from state allocation for external debt servicing in 2022.
Ghana
- The Purchasing Managers’ Index (PMI) for Ghana’s private sector in Apr-2023 rose to 51.3 from the 50.9 recorded in Mar-2023.
- The Parliament has approved a loan agreement between the Ghanaian government and the World Bank totaling $200.0mn to finance the Ghana Digital Acceleration Project.
- The project is to help the Government of Ghana increase broadband access, enhance the efficiency and quality of selected digital public services, and strengthen the digital innovation ecosystem in Ghana to help create better jobs and economic opportunities.
- Ghana’s Central Bank and the Ministry of Finance have signed a Memorandum of Understanding (MoU) to end Central Bank lending to the government. The agreement, a precondition to unlocking the $3.0bn relief loan from IMF, will take effect when the Fund’s board approves Ghana’s programme.
- In addition, the lawmakers passed finance bills required to back the government‘s bid to secure a loan from the International Monetary Fund (IMF). These bills include the excise tax stamp and concessional loans totalling $710.0mn. The house also approved standards for the automatic exchange of financial account information.
Francophone West Africa (WAEMU)
Ivory Coast
- According to the Institut National de la Statistique, Ivory Coast’s headline inflation accelerated to a four-month high of 5.2% y/y in March 2023 from 4.9% y/y in the prior month. Increases in the cost of transportation and food & non-alcoholic beverages drove the inflationary pressure.
- Ivory Coast oil output increased by 6.0% y/y to 9.3mn bbl. in 2022. The increase can be attributed to the rise in the commissioning of operating wells on block CI-27 and improved facilities on the Espoir field. Similarly, natural gas output rose 7.8% y/y to 90.3mn BTU in the same period.
- According to the Ivorian President, plans to introduce a new regional currency in West Africa have been delayed, given the economic damage brought about by Russia’s invasion of Ukraine and the lingering effects of the coronavirus pandemic.
- The West African Economic and Monetary Union (a bloc of eight predominantly French-speaking countries) agreed in 2019 to start phasing out the CFA franc. However, the process has been slow, with the launch of the new common currency pushed to 2027.
Mali
- According to the Institut National de la Statistique, Mali’s headline inflation rose to 7.5% y/y in March 2023 from 5.9% y/y in the previous month, reaching its highest rate in three months. As a result, the benchmark interest rate in Mali increased by 25bps to 5.0% from 4.75%.
East Africa
Kenya
- Stanbic Bank and S&P Global purchasing manager’s index (PMI) for Kenya’s in Apr-2023, fell to 47.2 from 49.2 in Mar-2023.
- According to the Kenya National Bureau of Statistics, Kenya’s GDP slowed to 4.8% y/y in 2022 vs 7.6% y/y in 2021. The agricultural sector contracted by 1.9% y/y, the manufacturing sector expanded by 2.7% y/y, and the construction sector grew by 4.1% y/y.
- According to the Energy Secretary, Davis Chirchir, the country owes oil marketers $308.0mn in unpaid subsidies to oil marketing firms.
Uganda
- Stanbic Bank and S&P Global release purchasing managers’ index (PMI) for Uganda in Apr-2023 rose to 55.4 from 53.2 in Mar-2023, and from 53.9 in Apr-2022. It represents its ninth consecutive monthly expansion. The output index rose to 58.9 in Apr-2023 vs 56.1 in Mar-2023, its highest reading since Oct-2021.
Tanzania
- According to the Bank of Tanzania, the country’s M3 money supply rose 15.9% y/y in Mar-2023 vs 11.5% y/y in Feb-2023. Credit to the private sector rose 22.9% y/y vs 22.5% y/y in Feb-2023.
- The IMF has completed the first review of the Extended Credit Facility arrangement and Article IV consultation with Tanzania, allowing immediate disbursement of the funds. The latest disbursement brings Tanzania’s total access under the arrangement to $304.7mn.
- According to the National Bureau of Statistics of Tanzania, the country’s Consumer Price Index (CPI) rose 4.7% y/y in Mar-2023 vs 4.8% y/y in Feb-2023.
Southern Africa
South Africa
- The South African Reserve Bank Governor, Lesetja Kganyago, unveiled upgraded banknotes incorporating enhanced security features, including colour-changing ink, to prevent counterfeiting.
- According to Absa Group economists led by Peter Worthington, South Africa’s primary budget deficit of 3.9% of gross domestic product for the fiscal year (2023) through Mar-2024 is unrealistic, as low economic growth will cause a revenue shortfall, and the public-sector wage deal, though modest, was higher than budgeted.
- The lender forecasts a 5.2% main budget deficit to GDP — and 6.3% if Eskom’s 254.0bn rand debt relief is counted above the line as an expenditure.
- According to S&P Global’s report on South Africa’s Purchasing Managers’ Index (PMI) for Apr-2023, the country’s PMI declined by 20bps to print at 49.6 pts, from 49.7 pts in Mar-2023.
- Earlier in the week, Aspen agreed with California-based Amgen to exclusively market, distribute, use, and sell its products in South Africa for an initial term of five years. Aspen’s share price rose as much as 2.8% after the announcement. Amgen is a biotechnology company whose products include Aranesp, Amgevita, Prolia, Repatha, NPlate, Vectibix, and Blincyto.
- In addition, the transaction includes future pipeline products and an opportunity to expand territory into the rest of sub-Saharan Africa.
- According to the Automotive Business Council (ABC), South Africa’s new vehicle sales fell less than economists expected in April 2023. New vehicle sales fell 0.2% y/y (estimate -1.0%) in April versus -0.6% in Mar-2023.
Angola
- According to Paulino Jeronimo, chairman of Angola’s petroleum agency, at a signing ceremony in Luanda, Partners including ANPG, TotalEnergies, and Sonangol Pesquisa e Producao will take a final investment decision in July on the first offshore oil exploration in Blocks 20 and 21 of the Kwanza Basin.
- The blocks are located about 150 kilometres southwest of Luanda; hydrocarbon deposits are thought to lie at a depth of about 1,700 meters. Additionally, the project will involve installing a floating production, storage, and offloading platform, the seventh of its kind that TotalEnergies has deployed in Angola.
- According to the Banco Nacional de Angola, gross reserves rose to $14.5bn in Apr-2023 from $14.1bn in March 2023, up by 2.6% m/m. This indicates a sustained climb in the country’s foreign currency earnings vis-à-vis its elevated oil production output.
- Also, Banco Nacional de Angola disclosed that Non-performing loans at Angolan banks fell to 14.4% of all loans at the end of 2022 from 20.26% at the end of 2021, with 49.0% of Angolans having access to banking services in FY-2022.
- According to a statement from Access Bank, the Bank has signed agreements with minority shareholders of Finibanco Angola “who have expressed an interest to sell their shares concurrently and targets to attain a total shareholding above 80.0% in Finibanco Angola S.A. after the transaction.
- Earlier in the week, Access Bank received approval from the Angolan central bank for its previously planned acquisition of a majority equity stake in Finibanco Angola.
Zambia
- According to Bloomberg, Zambian President Hakainde Hichilema plans to meet his French counterpart Emmanuel Macron on 10 May 2023 to try to conclude the southern African nation’s debt restructuring process.
- According to Energy Regulation Board Chairman Reynolds Bowa, effective from 01-May-2023, diesel price in Zambia was cut by 6.2% to 24.64 kwacha ($1.38) per litre. The petrol price was left unchanged at 27.59 kwacha per litre.
- First Quantum Minerals’ long-term rating was affirmed by S&P at B+, with Outlook revised to negative from watch negative. According to the agency, the negative outlook indicates expectations that credit metrics will be under pressure amid lower copper production and high costs.
- According to Treasury Secretary Felix Nkulukusa, Zambia’s budget will continue to face challenges if official creditors hold up an anticipated $188.0mn disbursement from the International Monetary Fund beyond the third quarter.
- According to Bloomberg, the Zambian kwacha’s 20.0% surge in Apr-2023 against the dollar makes it the world’s best-performing currency in April, with investors betting that a long-awaited debt restructuring may finally come to fruition.
- Zambia’s Eurobonds also benefited, with the nation’s dollar notes handing investors a 4.7% return in the period, outperforming the average 0.3% decline for the Bloomberg Emerging Markets Sovereign Index.
Zimbabwe
- According to Zimbabwe National Statistics Agency, consumer prices rose 75.2% y/y in Apr-2023 versus +87.6% in Mar-2023, indicating a 12.4ppts slowdown in the climbing pace of inflationary pressure in the local economy.
- According to Fidelity Gold Refinery, a unit of the central bank, Zimbabwe Gold Deliveries declined 4.2% in April to 2,377.0 kg from 2,481.0 kg a year earlier. Supply by large-scale miners increased to 903.0 kg from 859.0 kg; deliveries by small-scale miners dipped to 1,473.0 kg from 1,622.0 kg.
- Zimbabwe’s central bank plans to sell a gold-backed digital currency to the public from 08-May-2023 to stabilise its’ tumbling currency and offer an alternative to the US dollar. The plan requires $100.0mn worth of Gold.
- According to the central bank governor, John Mangudya, the tokens, which will be sold through banks in local and foreign currency at a 20.0% margin above the interbank mid-rate, will be introduced in two phases. The currency will initially be used for investment and then for transactions.
- According to Zimbabwe National Statistics Agency, The country’s trade deficit widened by 23.6% m/m to $229.2mn in Mar-2023 from a revised $185.5mn recorded in February 2023. Exports in March were $515.3mn, an increase of 18.0% from $435.9mn the previous month, while Imports rose to $744.5mn from $621.4mn.
Central Africa
Cameroon
- The Cameroonian government announced the opening of new Islamic credit lines as part of the National Strategy for Inclusive Finance (SNFI) 2023-2027, developed by the Ministry of Finance. This project aims to promote activities within the financial system with a total of CFA3.0bn dedicated to the project.
- The Cameroonian government is not ready to pay the CFA186.0bn in debt claimed by the national electricity company “Eneo”. The state believes that the amount owed to the company is less than what is claimed.
Democratic Republic of Congo
- According to the International Monetary Fund (IMF), inflationary pressures in Congo remain persistent amid a depreciating currency due to increased fiscal pressure from upcoming elections and fighting in the country.
- The statement was made after the IMF reviewed its three-year, $1.5bn loan program with the country. The review’s conclusion enables the Republic of Congo to draw the equivalent of SDR 64.8mn (c. $87.0mn) as a disbursement under the Extended Credit Facility (ECF) arrangement.