Image Credit: United Capital

December 8, 2023/United Capital

Anglophone West Africa
Nigeria

• Nigeria’s PMI contracts record 4x in 2023 as reforms take toll

Business activity in Nigeria has shrunk four times so far in 2023 on the back of reforms implemented by President Bola Tinubu, a new Purchasing Managers’ Index (PMI) has shown. The latest monthly PMI by Stanbic IBTC Bank showed the headline index dropped to the lowest in eight months of 48.0 in November 2023 from 49.1 in the previous month, marking the second straight month of contraction.
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• Foreign Reserves Decline by $4.07bn in 11 Months as CBN Clears FX Backlog

Nigeria’s foreign reserves dropped by $4.07 billion in 11 months of 2023 amid Central Bank of Nigeria (CBN) intervention in the foreign exchange market. Nigeria’s foreign exchange buffer closed November 30, 2023 at $33 billion; dropping by nearly 11 per cent or $4.07 billion from $37.069 billion it opened this year.
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• FG’s deficit spending rises 11% to N7.88trn

The Federal Government recorded an 11 per cent, year-on-year, YoY increase in deficit spending to N7.88 trillion in seven months, from January to July, from N7.13 trillion in the corresponding period of 2022. The rise in deficit spending was driven by 20.5 per cent increase in expenditure which moderated the impact of a 45 per cent increase in revenue during the seven months period, 7M’23.
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• Nigeria’s oil revenue at risk as NNPC changes cargo prices

A cloud of uncertainty hangs over Nigeria’s oil sector as the state-owned Nigerian National Petroleum Corporation (NNPC) implements a controversial shift in how it prices its crude cargoes. The move, effective next month, has sent shockwaves through the trading community and raised concerns about potential erosion of the country’s oil revenue.
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• FG to implement telecoms tax, may raise VAT rate

The Federal Government is set to implement excise duty on telecommunication services to boost its revenue base. It disclosed this in its newly released 2024-2026 Medium-Term Expenditure Framework and Fiscal Strategy Paper.
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• CBN declares no transactions on accounts without BVN, NIN from March 2024

The Central Bank of Nigeria (CBN) on Friday said all accounts without Bank Verification Number (BVN) and the National Identity Number (NIN) would be restricted from transactions starting from March 1, 2024. This comes as the apex has made BVN and NIN mandatory for all bank accounts opening.
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• Nigeria, Germany sign agreement to expedite implementation of Presidential Power Initiative  

On the sidelines of the ongoing COP28 climate summit in Dubai, United Arab Emirates, President Bola Tinubu and German Chancellor Olaf Scholz witnessed the signing of an agreement targeted at expediting the implementation of the Presidential Power Initiative (PPI) to improve electricity supply in Nigeria.
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Ghana

• Ghana Parliament approves 2024 Budget

Parliament has approved the Budget Statement and Economic Policy of the Government for the fiscal year ending December 31, 2024 after a head count of members. The Majority had 138 votes as against 136 for the Minority.
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• Ghana minister confident of official creditor debt deal by end of next week

Ghana’s Finance Minister Ken Ofori-Atta said on Thursday that he was confident the country would reach a restructuring deal with its official creditors by the end of next week. The “cut-off date” – the date after which new loans will not be restructured – and the comparability of treatment between creditors are the major outstanding issues, Ofori-Atta told reporters, adding that any cut-off date would be fine for Ghana.
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• Govt Earmarks Gh¢400m for Tourism

Government will from next year commit over GH¢400 million to provide new tourist attraction sites while renovating existing ones, the Minister of Finance, Ken Ofori-Atta, disclosed. These tourist attractions, he said, would include building museums and rehabilitating attraction sites such as the Shai Hills, Mole National Park, Cape Coast, and Elmina castles.
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Francophone West Africa
Ivory Coast

• Ivory Coast Raises 2023 Budget by 7% to 12.51 Trillion CFA Franc

The budget deficit is projected to widen to 5.2% of the gross domestic product from the 4.8% initial estimate, according to a statement on the government website. GDP growth this year is forecast at 7% compared with 6.7%. in 2022 Inflation projected to end the year at 4.8% compared with 5.2% at end-2022
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• IMF Executive Board Completes the First Reviews of Côte d’Ivoire’s Extended Credit Facility and Extended Fund Facility

The IMF executive board completes the first reviews under the 40-month ECF/EFF arrangements with Côte d’Ivoire, according to a statement. The facility provides the country with immediate access to the second disbursement of $495m. The Program implementation has been robust so far, with all quantitative criteria and structural benchmarks met
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• Bank of West African States Raises Key Interest Rate to 3.5%

According to a statement on its website, the monetary policy committee of the central bank, also known as BCEAO, decided to increase the policy interest rate by 25 basis points. Risks to inflationary outlook point to the upside, linked to regional and international factors. “The increase in the key rate, therefore, aims to anticipate and contain the impact of these risk factors.”
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Senegal

• Senegal Cotton Production Forecast to Rise 20%

Senegal’s cotton production is forecast to rise 20% in the marketing year from August 2023 through July 2024 compared with the prior year, the U.S. Agriculture Department disclosed.
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• West African Air Travel in 2024

For years, we have heard about West Africa’s tourism industry being on the verge of exponential growth. Industry insiders in the mid-2010s often opined that Lagos, Dakar, or Accra would be the next big thing in African tourism.
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• Senegal Lawmakers Adopt 9.2% Budget Increase Y/Y for 2024

Senegal’s budget for 2024 is set at 7 trillion CFA francs, including 1.2 trillion CFA francs of debt amortisation, Finance Minister Mamadou Moustapha Ba tells lawmakers in Dakar. 2024 growth is expected at 9.2%, driven by foreign direct investment in the hydrocarbons sector and the approval of a $1.8b IMF program that should cover budget deficits until 2025.
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East Africa
Kenya

• Kenya Surprises With Biggest Rate Hike in More Than a Decade

Kenya’s central bank unexpectedly raised its benchmark interest rate for the second time since Governor Kamau Thugge took office in June, citing the need to support the country’s battered shilling. The monetary policy committee increased the rate by 200 basis points to 12.5%, the largest increase since 2011.
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• Kenya private sector activity contracts for third month in Nov -PMI

Kenya’s private sector activity declined for a third straight month in November, a survey showed, as businesses struggled with soaring costs. The Stanbic Bank Kenya Purchasing Managers’ Index (PMI) fell to 45.8 last month, from 46.2 in October.
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• Kenyan inflation dips to 6.8% year-on-year in November

Kenya’s inflation eased slightly to 6.8% year-on-year in November from 6.9% a month earlier, the statistics office said. On a month-on-month basis inflation was 0.2%, compared to 1.0% in October, the Kenya National Bureau of Statistics (KNBS) said in a statement.  Transport, housing and utilities, and food were major contributors to the East African nation’s year-on-year inflation, KNBS said.
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• Kenya could get $1 bln loan from China this fiscal year, central banker says

Kenya is likely to get a fresh $1 billion loan from China in this financial year and it could use the cash to partly settle a Eurobond that is maturing next June if it comes in time, the governor of the central bank said. The loan was first announced by Kenyan authorities in October, marking a shift in the government of President William Ruto’s stance on Chinese lending after criticising the loans during last year’s election campaign.
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• Counties to Receive Sh470 Billion in Proposed Revenue Allocation for Next Financial Year

Devolved units are set to reap heavily from the proposed recommendations for sharing revenue between the National Government and the County government following an increase of Sh22 billion for their allocation in the financial year 2024/2025.
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• India Grants Kenya U.S.$250 Million Support in Agriculture, Vaccine Production

President William Ruto has revealed that India has granted Kenya with US$250 million that will be used in an array of areas including agriculture as well as vaccines. This follows bilateral engagements between President William Ruto and his Indian counterpart in New Delhi India.
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Rwanda

• UK interior minister signs new Rwanda treaty to resurrect asylum plan

British interior minister James Cleverly signed a new treaty with Rwanda in an attempt to overcome a court decision to block the government’s controversial policy of sending asylum seekers to the East African country. The Rwanda plan is at the centre of the government’s strategy to cut migration and is being watched closely by other countries considering similar policies.
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• Rwanda’s Mining Sector Holds U.S.$150 Billion Potential

Rwanda’s mineral reserves present an economic potential of $150 billion (approx. Rwf186 trillion) that can be realised by employing modern exploration and exploitation techniques, the CEO of Rwanda Mines, Gas, and Petroleum Board (RMB) said.
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• Rwanda Revenue Authority Launches Single Portal for All Online Services

Rwanda Revenue Authority (RRA) has launched “MyRRA” a system that consolidates all its online services within a unified portal. The portal has commenced with VAT-registered businesses, enabling seamless submission of tax declarations and online payments, but RRA will extend it to all taxpayers, allowing them to view their tax account status across various tax types, review outstanding tax amounts, and anticipate upcoming declarations.
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Tanzania

• TRA, ZRA in final stages of integrating their tax systems

Tanzania Revenue Authority (TRA) and Zanzibar Revenue Authority (ZRA) are on the final stages of integrating their tax systems for a convenient revenue administration especially for traders whose transactions involve the two sides of the country.
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• Life Insurance in Tanzania Up by +46.7% in 2022: Insights from TIRA Report

The Tanzanian insurance sector has showcased a significant leap in its life insurance segment, as revealed in the Tanzania Insurance Regulatory Authority (TIRA) 2022 report that was just released. Amidst global challenges, the Tanzanian insurance sector demonstrated resilience and stability and registered a 46.7% increase in the life insurance segment with gross written premiums rising from TSZ 165 billion in 2021 to TSZ 242 billion in 2022.
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• Tanzania’s President Signs Universal Health Insurance Bill into Law

In a significant move towards improving healthcare accessibility in Tanzania, President Dr. Samia Suluhu Hassan has signed the Universal Health Insurance Bill into law. This landmark legislation, aimed at ensuring health coverage for all Tanzanians, especially those from lower-income brackets, marks a historic moment in the country’s healthcare sector.
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Uganda

• Uganda holds policy rate to anchor inflation around target

Uganda’s central bank kept its policy rate unchanged, saying that although it thought inflation had bottomed out there were still significant uncertainties on the horizon. The decision to keep the rate at 9.5% was the second “hold” decision in a row.
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• Stanbic Uganda November PMI rises to four-month high

A closely watched measure of activity in Uganda’s private sector rose to a four-month high in November as customer demand strengthened. The Stanbic Bank Uganda purchasing managers’ index, a measure of the health of the private sector, jumped to 53.4 in November, up from 52.4 the previous month.
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• Uganda plans to double domestic borrowing in 2023/24 FY -finance ministry

Uganda is planning to more than double its level of domestic market borrowing to 6.8 trillion Ugandan shillings ($1.79 billion) in the 2023/24 financial year to help finance new spending needs, the ministry of finance said. Government finances have been squeezed since the World Bank cut lending earlier this year to protest against the enactment of one of the world’s strictest anti-homosexuality laws.
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South Africa
Angola

• Angola Plans Inaugural Green Bond Sale in 2024

Angola Plans Inaugural Green Bond Sale in 2024. The Proceeds will finance projects directly contributing to environmental sustainability, Minister of State and Economic Coordination Jose de Lima Massano says at a conference in Luanda, the capital.
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• Switzerland Angola Sign DTA Protocol.

The Swiss State Secretariat for International Finance Nov. 30 announced the same date signing of a DTA and protocol with Angola
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• Masdar to Develop 150MWac Solar Plant in Angola

Masdar, the UAE’s flagship renewable energy company, signed an agreement with Angola’s Ministry of Energy and Water at COP28 to develop a solar plant in southern Angola. The Project will create up to 600 jobs and deliver clean energy to 90,000 homes in regions with significant electricity supply challenges.
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• Angola Rejects OPEC Quota and Plans to Break It

Angola rejected a new output quota handed to it by OPEC and said it planned to breach it, a rare challenge to the cartel that heralds more infighting ahead. “We will produce above the quota determined by OPEC,” Angola’s OPEC governor Estevao Pedro said in an interview on Thursday.
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South Africa

• South Africa Warns Others Not to Go From Electricity to Darkness

One of the architects of South Africa’s groundbreaking deal with rich nations to move more quickly away from coal sounded a note of caution to other countries considering similar agreements.  Environment Minister Barbara Creecy urged developing nations to prioritise energy security and jobs in any arrangement.
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• South Africa October Producer Inflation Up on Fuel Prices

South African producer inflation rose for a third straight month in October after a double-digit jump in gasoline prices, but subsequent declines in fuel costs could ease pressures in the future. The annual rate jumped to 5.8% in October — the same as a median of seven estimates from economists in a Bloomberg survey — from 5.1% the month before, according to data published
 by Pretoria-based Statistics South Africa.
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• Economy Shrinks as Power Outages Take Toll

South Africa’s economy shrank in the third quarter as logistics constraints and a chronic electricity
shortage took its toll.
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Central Africa
Cameroon

• Cameroon Plans 6.74 Trillion CFA Franc Budget for 2024

The spending target represents an increase of 0.2%, or 13.2 billion CFA franc from 2023, according to the draft bill presented to lawmakers.  Domestic revenue and grants are projected to increase by 8.6% to 5.19 trillion francs. The budget focused on job creation, poverty alleviation, strengthening national defence and internal security, and improving the investment climate.
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• Cameroon receives $80mn loan from AfDB to build a bridge to Equatorial Guinea

Cameroon has received a €73.4mn ($80mn) loan from the African Development Bank (AfDB) to build a bridge across the River Ntem, which forms a natural boundary with Equatorial Guinea. The project is part of the Regional Trade and Transport Facilitation Project for the economic corridor between Cameroon, Equatorial Guinea and Gabon states.
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• Fitch Affirms UBA Cameroon S.A. at ‘B-‘; Outlook Stable

Fitch Ratings has affirmed UBA Cameroon S.A.’s (UBA CAM) Long-Term Issuer Default Rating (IDR) at ‘B-‘. The Outlook is Stable. Fitch has also affirmed the bank’s Viability Rating (VR) at ‘b-‘ and Shareholder Support Rating (SSR) at ‘b-‘.
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• Cameroon targets 4.5% growth in 2024

Cameroon aims for economic growth of 4.5% in 2024, up from the 3.9% forecast in 2023, Prime Minister Joseph Dion Ngute has said.  Delivering the government’s 2024 program to the National Assembly, Ngute acknowledged that the macroeconomic targets are very ambitious amid the challenges facing the central African nation as a result of both internal and external factors.
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• Cocoa Rally Fuels Bean Theft, Soaring Rents in Cameroon, Nigeria

From thieves stealing pods to traders rigging scales — high drama is unfolding in Nigeria and Cameroon’s cocoa markets — as everyone jostles for the massive profits on offer as prices of the chocolate ingredient have soared to their highest in over forty years.
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