February 16, 2024/United Capital Research
Anglophone West Africa
Nigeria
- Power minister laments as electricity subsidy rises to N3tn
According to the Federal Government of Nigeria, the indebtedness of Nigeria’s power sector to electricity generating companies and gas producers has risen to about N3.3tn, and subsidy on electricity for 2024 would gulp about N3.0tn, whereas only N450.0bn was budgeted for this purpose in this year’s budget. The Minister of Power, Adebayo Adelabu, further added that Nigeria must begin to move towards a cost-effective tariff model, as the country is currently indebted to the tune of N1.3tn to electricity generating companies, while the debt to gas companies was $1.3bn.
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- Nigeria inflation approaches 30%, highest since mid-1996
Nigeria’s inflation rate accelerated further in January and reached almost 30% in annual terms, driven by soaring food costs and the fall of the country’s naira currency to record lows. Consumer inflation rose for the 13th straight month in January to 29.90% y/y from December’s 28.92%.
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- Dangote refinery to export two fuel cargoes
The Dangote Petroleum Refinery has issued tenders to sell two fuel cargoes for export, the first cargo from the newly commissioned refinery has been awarded to Trafigura and is due to load at the end of February. The refinery has also purchased some U.S. oil and is expected to receive two million barrels of U.S. WTI Midland in early March.
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- Nigeria mulls state policing to combat growing insecurity
Nigeria is considering the introduction of state police in its 36 states to bolster its national police force as it struggles to contain widespread violence and insecurity. This is the first time that Nigeria’s federal and state governments have agreed on the need to set up state police to reinforce the more than 300,000-strong national police force in Africa’s most populous nation.
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Ghana
- Ghana overseas debt restructuring seen delayed not scuppered by new fin min
International investors greeted the removal of Ghana’s finance minister with caution on Wednesday, as they braced for the prospect of more delays to the restructuring of the country’s overseas debt ahead of national elections in December. The replacement of Ken Ofori-Atta with Mohammed Amin Adam, minister of state in the finance ministry, was not expected to completely scupper negotiations over the debt restructuring. But the prices of eurobonds issued by Ghana slipped on the fresh uncertainty.
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- Suspension of VAT on electricity victory for all
The Industrial and Commercial Workers Union (ICU) has described the government’s decision to suspend the Value Added Tax (VAT) on electricity as a victory for labour and Ghanaians. Sharing his thoughts on the suspension, the General Secretary of the ICU, Morgan Ayawine, said the union remained on high alert to respond to any other decision of the government.
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Francophone West Africa
Senegal
- Senegal Inflation Rate Accelerates in January
The annual inflation rate in Senegal accelerated to 2.1% in January 2024 from an over two-year low of 0.8% in the previous month, marking the highest reading in three periods. Main upward pressures came from the sharp rise in costs of food and non-alcoholic beverages (2.6% vs -0.3% in December). On a monthly basis, the CPI fell 0.5%, moderating from a 1.2% drop in December.
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- Senegal ‘better positioned than some’ to navigate investor concern, says IMF
Senegal’s diversified funding sources mean it could be better placed than some countries to navigate investor concerns sparked by political uncertainty, after President Macky Sall delayed a presidential election, the International Monetary Fund said. A significant portion of Senegal’s funding is on concessional terms, and a planned reduction in issuing more expensive syndicated loans will minimise its dependence on volatile private debt.
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- Senegal cuts internet again amid widening crackdown on dissent
Senegal cut mobile internet access on Tuesday ahead of a banned march against the postponement of a presidential election, and rights groups accused the authorities of using overly repressive tactics to stifle widespread opposition to the delay.
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Niger
- Moody’s pushes Niger’s rating deeper into junk
Global ratings agency Moody’s on Friday pushed Niger’s sovereign rating deeper into junk territory on the accumulation of unpaid debts. Moody’s downgraded the long-term foreign and local currency ratings of the Government of Niger to Caa3 from Caa2. Data from the West African regional debt management agency showed in November that Niger missed payments on interest and capital totaling 187.136 billion CFA francs.
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- West Africa bloc urges Burkina, Niger and Mali not to withdraw
The West African regional bloc ECOWAS pushed junta-led Burkina Faso, Niger and Mali to reconsider their decision to quit the political and economic alliance, it said on Thursday, warning of the hardships the move would force on their citizens. The three countries’ self-appointed military leaders jointly announced on Jan. 28 they were abandoning the bloc after it pressured them to restore constitutional order following a string of coups.
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East Africa
Kenya
- Kenya Issues New Eurobond, Reduces $2b Debt Default Chances
The government has reduced its chances of defaulting payment on $2 billion debt due mid this year after successfully issuing $1.5billion new Eurobond. According to a statement by the National Treasury, the new Eurobond issuance is priced at 10.375 per cent and is due in 2031. The bond will be repaid in three installments beginning 2029, 2030 and 2031 resulting in a weighted average life of six years.
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- Cabinet Approves Sale of Development Bank of Kenya, 5 Others
The cabinet has approved the sale of Development Bank of Kenya (DBK) and five other non-strategic commercial state-owned enterprises. The others are Kenya Safari Lodges and Hotels, Golf Hotel, Sunset Hotel, Mt. Elgon Lodge and Kabarnet Hotel. The move to sell the tourism service sector entities is meant to stimulate the expansion of hospitality industry and grow the individual units through private sector investment.
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- Kenyan Banks More Cautious in Approving Loans- CBK Survey
The uptake of credit is likely to be slow in the early months of 2024, dampened by low business activities due to multiple taxes, expensive foreign currency as well as high interest rates. According to Central Bank of Kenya’s January 2024 Market Perception Survey, 79 percent of the respondents expect economic uncertainty to drive banks to become more cautious to minimize the risk of default.
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- EPRA Cuts Feb-Mar Fuel Prices by KSh 1 per Litre
EPRA (Energy and Petroleum Regulatory Authority) has reduced the price of petrol, diesel and kerosene by KSh 1.00 per litre, reflecting a drop in the price of world crude oil for the past three months. In Nairobi, super petrol, diesel and kerosene will now sell at KSh 206.36, KSh 195.47 and KSh 193.23 respectively for the next 30 days. These prices are inclusive of 16% Value Added Tax (VAT).
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- New Kenya Bond Exchange Sees Opportunity in Budding Debt Market
The new East African Bond Exchange, a would-be competitor for the Nairobi Securities Exchange, sees the prospect for exponential growth in Kenya’s bond market as it prepares to start operating in the first half of this year.
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- Kenya’s power imports from Uganda rise 18% in January on high demand
Kenya’s electricity imports from Uganda increased 18.4 per cent in January, fuelled by a bigger demand. Data from the Energy and Petroleum Regulatory Authority (EPRA) shows that Kenya last month imported 20.29 million units of power from the Uganda Electricity Transmission Company Limited.
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Rwanda
- Rwanda Consumer Price Index up by 3.1 percent
The National Institute of Statistics Rwanda (NISR) has released updated information indicating an increase in consumer prices in urban areas compared to the rural ones. The report showed that the urban Consumer Price Index (CPI) increased by 5% on annual basis (January 2024 compared to January 2023) and it decreased by 0.1% on monthly basis (January 2024 to December 2023). The overall Rwanda CPI increased by 3.1% on annual basis and it decreased by 0.9% on monthly basis.
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Tanzania
- Tanzania, Norway to bolster trade, business ties
Tanzania and Norway have agreed to strengthen bilateral relations, with a focus on promoting trade and business cooperation. The Tanzanian President Samia Suluhu Hassan, visited Norway following an invitation from King Harald and Queen Sonja of the Kingdom of Norway, the visit marked the 60th anniversary of bilateral relations between Tanzania and Norway. As part of the visit, the Tanzania-Norway Business Forum was held, organised by the Norwegian African Business Association (NABA).
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- Tanzania re-elected as AU’s Security Council member
Tanzania has been re-elected as a member of the African Union Peace and Security Council (AUPSC) with a two-year mandate effective immediately. According to AU their membership is effective April 1, 2024. The AU stated that March 30, 2024, will mark the end of the mandate of the 10 members of the African Union (AU) Peace and Security Council (PSC) who were elected for a two-year term in February 2022 during the AU Summit.
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- Samia woos Norway investors
President Samia Suluhu Hassan in her visit to Norway, called upon investors from Norway to explore opportunities in key sectors for the nation’s development, including renewable energy, agriculture, oil, gas, investment funds, and transportation. The President made this call while addressing delegates at the Tanzania-Norway Trade and Investment Forum. Tanzania’s favorable geographic location provides convenient access and border connections to eight neighbouring countries that are major markets for investors.
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Uganda
- Uganda to list bonds on global indices
Uganda is broadening its strategy to boost dollar reserves by listing bonds on multiple emerging and frontier market indices. The move seeks to woo foreign investors, who have recently withdrawn from Uganda to move to countries with high interest returns.
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- Uganda’s External-Debt Obligations Jump 16% This Fiscal Year
Uganda’s external-debt obligations have risen 16% this fiscal year and the nation is banking on inflows for budget support, the oil industry and a recovery of portfolio investment to fund the repayments, according to the central bank.
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- Labour export earned govt Shs25b in two years
Government earned Shs25b from exportation of migrant workers in the two years to 2023, Ministry of Gender data indicates. The money was largely earned from expression of interest fees, fines, accreditation, job orders (local and foreign) and license fees.
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South Africa
Angola
- Angola Jan. National Consumer Prices Rise 21.99% y/y
Angola’s national consumer prices rose 21.99% y/y in January versus +20.01% in December, according to the Instituto Nacional de Estatistica. Luanda CPI rise 29.22% y/y versus +26.02% in December.
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- Angolan Treasury to Inject $300m into Forex Market on Feb. 14
The Angolan treasury, which temporarily abstained from dollar sales last year, will provide a total of $300m to the forex market on Feb. 14. The $300m will be available throughout the week until it runs out, the central bank says in a statement on its website.
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- Insurance in Angola remains below one percent of GDP
The Director of the Angolan Regulation and Supervision Agency’s Legal Office (Arseg), Aldemiro Gonçalves, regretted the fact that insurance in the country was below one percent of Gross Domestic Product (GDP).
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- Banana production break records in Angola
Banana production in the province of Benguela has increased significantly in recent years, rising from 15,000, in 2016, to 127,000 tons/year in the 2022/23, ANGOP learned last week.
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South Africa
- South African Mining Production Rebounds in Fourth Quarter
South African mining production rebounded in the final three months of last year, a bright spot for the industry which saw overall output in 2023 drop on an annualized basis. Production grew 2.5% in the fourth quarter after a 0.9% slump in the prior period, according to data released by Statistics South Africa.
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- Budget 2024: Finance Minister expected to cut clean energy incentives for businesses
Amid fiscal constraints ahead of the 2024 Budget speech next week, Finance Minister Enoch Godongwana is expected to cut incentives for solar energy installations by enterprises and individuals.
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- South Africa’s Retail Sales Surge by 2.7% in December 2023
South Africa’s retail sector experienced a remarkable surge in December 2023, as the country’s retail sales indicator has reached 2.7%. This impressive growth comes as a stark contrast to the previous month’s indicator of -1%. The data, which was updated on February 14, 2024, shows a positive change in the retail landscape, providing a much-needed boost to the country’s economy.
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- South Africa Says Visit by Iranian President Raisi Postponed
Iranian President Ebrahim Raisi will visit South Africa later this month. President Cyril Ramaphosa will host Raisi on a state visit at Pretoria, the capital, on Feb. 27, the African country’s presidency said in a notice to media.
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- BRICS 4Q GDP Forecast Steady in Past Week; India Seen at 6.4%
The median fourth-quarter gross domestic product growth forecast for the BRICS countries was unchanged from the past week at 5.0%, according to Bloomberg surveys.
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Zambia
- Zambia Central Bank Hikes Key Rate to Almost Seven-Year High
Zambia’s central bank raised its benchmark interest rate to the highest level in almost seven years to tame inflation and support the kwacha. The monetary policy committee increased the rate for a fifth straight meeting to 12.5% from 11%, Governor Denny Kalyalya told reporters in the capital, Lusaka.
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- 7YRDS Unit Plans 50 MW, $49m Solar Plant in Zambia
Sevenyrds Energy, a unit of 7YRDS Group of Germany, plans to develop a 50-megawatt solar project in Lusaka province’s Kafue district at a cost of $49 million, the state-owned Times of Zambia newspaper reports, citing company Managing Director Brandon Imataa.
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Zimbabwe
- Zimbabwe Lithium Miner Cuts 300 Jobs to Contain Costs
Zimbabwean state miner Kuvimba Mining House has laid off 300 workers at its lithium operations due to a decline in commodity prices, Business Times reports, citing Godwin Gambiza, general manager at the company’s Sandawana Mines unit.
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- Zimbabwe Central Bank Accumulates Almost a Ton of Gold Reserves
Zimbabwe’s central bank accumulated 793 kilograms (25,000 ounces) of gold reserves since introducing a law that compels mining companies to pay part of their royalties using the metal. The reserves were collected after mines in the southern African nation produced 30.1 tons of gold last year, compared with a record 35.3 tons a year earlier, Reserve Bank of Zimbabwe Governor John Mangudya said by phone from the capital, Harare.
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- Zimbabwe Weighs Using Gold to Back Its Foundering Currency
Zimbabwe may back its currency with gold in an effort to end exchange-rate instability, Finance Minister Mthuli Ncube said. “In order to manage growth of liquidity, we may link the exchange rate to a hard asset such as gold,” the minister said in an online press briefing held Monday to announce a conference of African ministers that Zimbabwe will host at the end of this month.
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Central Africa
Cameroon
- Cameroon Commits to Automatic Exchange of Financial Account Information by September 2026
Cameroon, a member of the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) since 2012, has committed to implement the international Standard for Automatic Exchange of Financial Account Information in Tax Matters (AEOI) by September 2026.
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- Cameroon’s power firm grapples with debts as investor Actis prepares exit
Cameroon’s power utility Eneo is working to restructure debts and dealing with a liquidity problem, the CEO said on Thursday as it confirmed its major shareholder, investment fund Actis, planned to sell its stake to the government. British private equity firm Actis, which has been bought by New York-based private equity firm General Atlantic, pending regulatory approval, has a 51% stake in the company, while Cameroon’s government owns 44%.
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