United Capital Weekly Pan African Monitor Thursday 28-Mar-2024

Image Credit: United Capital Research

March 28, 2024/United Capital Research

Anglophone West Africa

  • CBN raises interest rate to 24.75%

The Monetary Policy Committee (MPC) has concluded its two-day meeting for March 2024. This meeting marks the second MPC meeting for the year 2024 and the 294th meeting of the CBN. The MPC at the end of their meeting voted to hike the MPR by 200 basis points. The Committee voted as follows: Raise the MPR by 200bps to 24.75% from 22.75%, increase the asymmetric corridor to +100bps/-300bps, retain the Cash Reserve Ratio (CRR)of Deposit Money Banks at 45.0% and adjust the CRR of Merchant Banks from 10.0.0% to 14%.
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  • Nigeria’s money supply hits historic N95.56 trillion in Feb 2024 despite MPC’s tightening stance

Nigeria’s broad money supply (M3) has surged to a new historic high of N95.56tn as of February 2024 despite the hawkish tightening stance of the Monetary Policy Committee (MPC). This figure represents a staggering 79.29% surge from the N53.3tn recorded in February 2023, showcasing a substantial y/y growth of N42.26tn, compared to the preceding month of January 2024, which stood at N93.72tn, this represents a 1.96% increase, equivalent to N1.84tn.
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  • CBN sells $10,000 to BDC at N1,251/$1

The Central Bank of Nigeria (CBN) has issued a circular to Bureau De Change (BDC) operators informing them of the sale of $10,000 to each BDC at a rate of N1,251/$1. The Apex Bank directed each BDC to sell the Dollar to eligible customers at a rate not exceeding 1.5% above the purchase price, implying that each BDC is not expected to sell above N1,269/$1.
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  • FG deducts N415bn state allocations for debt servicing

According to data from the Federation Account Allocation Committee (FAAC) Disbursement reports published by the National Bureau of Statistics (NBS), the Federal Government has deducted over N415.0bn from state government allocations to service their external loans. An analysis of the report showed that the deductions incurred by the sub-nationals were N57.0bn in 2019, N74.0bn in 2020, before increasing to N86.2bn in 2021, N78.0bn in 2022 and N120.01bn as of December 2023. The figure indicated an increase of 110.0%, signalling the country’s huge debt amidst dwindling revenue.
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  • Ghana seeks to speed up debt restructuring negotiations

Ghana wants to speed up remaining debt restructuring negotiations, its finance minister announced on Tuesday, as the government pushes for a deal to rework over $13bn of international bonds. The West African country has been overhauling its debts as it tries to emerge from its worst economic crisis in a generation with the help of a $3bn International Monetary Fund (IMF) programme.
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  • Ghana central bank flags worse inflation outlook as it holds key rate

Ghana’s central bank on Monday kept its main interest rate at 29%, saying the inflation outlook had worsened slightly over the past two months and required close monitoring. Inflation rose slightly in January before slowing again in February, and central bank governor Ernest Addison told a news conference that the latest inflation forecasts showed a more elevated profile than at the last policy meeting in January. Addison said the CRR would be set at 15% for banks with a loan-to-deposit ratio above 55%, at 20% for banks with a loan-to-deposit ratio between 40% and 55%, and at 25% for banks with a loan-to-deposit ratio below 40%.
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  • Ghana’s export earnings stagnate at $2.8bn as contribution of cocoa drops by $200m

The latest assessment of Ghana’s external sector developments shows that the country earned $2.8bn from its major exports in the first two months of 2024. On a y/y basis, however, the value of exports did not see any significant growth from the same $2.8bn posted as of February the previous year. Per the data from the Bank of Ghana’s Summary of Macroeconomic and Financial Data for March 2024, the positive trade balance accounted for 0.5 of GDP, which is a decline from the 1.1% of GDP recorded in February 2023.
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Francophone West Africa (WAEMU)

  • Senegal’s opposition candidate Faye won over 54% of vote, full provisional results show

Opposition candidate Bassirou Diomaye Faye won over 54% of votes in Senegal’s presidential election, with ruling coalition candidate Amadou Ba taking over 35%, the Dakar appeals court said on Wednesday. The court said the results were based on vote tallies from 100% of polling stations. They are expected to be confirmed by the Constitutional Council in the coming days.
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  • Russia, Mali to strengthen counterterrorism efforts

Russia and Mali agreed to strengthen their cooperation over counterterrorism in a telephone call according to both parties, following the attack in Moscow that killed at least 137. Russian President Vladimir Putin spoke to the head of the Malian junta, Colonel Assimi Goita, and the President of Congo-Brazzaville, Denis Sassou Nguesso.
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East Africa

  • Kenyan lender Equity Group posts 13% slide in 2023 pretax profit

Kenyan lender Equity Group reported a 13% fall in 2023 pretax profit to 51.9bn shillings ($396mn) on Wednesday, weighed down by a surge in provisions for bad debts. The East African country’s top lender by earnings, Equity increased its loan loss provisions by 139% to 32.8bn shillings, it said, after its gross nonperforming loans nearly doubled.
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  • Kenya Airways swings to first operating profit since 2017

Kenya Airways swung to an operating profit of 10.53bn shillings ($80.38mn) last year, it said on Tuesday. One of Africa’s three biggest carriers, Kenya Airways slid into insolvency in 2018 after an expansion drive left it with hundreds of millions of dollars in debt. Last year’s operating profit was the airline’s first since 2017, it said, buoyed by a 53% increase in revenue to 178.5 billion shillings.
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  • Electricity demand soars on economic recovery

Electricity demand hit a fresh peak of 2,177.13 Megawatts(MW) last month, signalling the uptick in economic activities and consumption by households. Official data from the Energy and Petroleum Regulatory Authority (Epra) shows that the record demand came on February 24, coinciding with a period when local generation dipped to the second lowest in at least eight months. The new record of power demand indicates a continued rise in economic activities and consumption by households, handing a major boost to Kenya Power. But the surge in demand came in a month when local generation of electricity dropped to 1,110.44 Gigawatt hours (GWh)– the second lowest after the 1,109.52 GWh output posted in December last year.
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  • BoT injects 100 million US dollars to prop up shilling

Last week, the Bank of Tanzania (BoT) sold 100mn US dollars and plans to release more to local commercial banks in the country in efforts to stabilise the shilling against the US currency. The governor explained that after reforms and reviews of the forex law, BoT welcomes investors in the business and that there would be no red tapes. The BoT would now issue licenses within five working days. The requirement for local (Tanzanians) investors is only 500m/- minimum capital for grade A, while Grade B the minimum capital is 200m/- and Grade C (which include hotels of three-stars and above), no minimum capital requirement.
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  • Tanzania eyes single African air transport market

Tanzania has unveiled a plan to join the Single African Air Transport Market (SAATM) which offers immense air transportation business opportunities for the country to generate more income. The SAATM is a project of the African Union to create a single market for air transport in Africa and is supposed to allow significant freedom of air transport in the African Continent.
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  • Tanzania, DRC trade volume set for new heights

The Democratic Republic of Congo (DRC) has launched the Commercial Section Office in Charge of Mineral Business Products to uplift trade volume with Tanzania. Through this new arrangement, DRC minerals which pass through the Dar es Salaam Port will be certified in the country. Establishment of the office, among others, will enhance minerals business and curb smuggling which over decades has undermined the DRC export through the port.
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South Africa

  • Angola Government Workers Strike for Better Pay as Costs Rise

Angolan government workers began a three-day strike to press for higher wages and lower taxes to make up for rising living costs in Africa’s second-biggest oil producer. The strike was called after labor unions failed to reach an agreement with the government on a higher minimum wage, which currently stands at 32,000 kwanza ($38) per month.
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  • Djeno Exports to Drop in May; OPEC+ Cuts Seen Working

Republic of the Congo plans to reduce loadings of Djeno crude in May. OPEC+ delegates see no need to recommend any changes to oil supply policy at a review meeting next week, as output quotas already set for the first half are proving effective.
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South Africa

  • Repo rate remains unchanged at 8.25%

The Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) has decided to hold the repo rate unchanged at 8.25%. Addressing a media briefing on Wednesday, SARB Governor Lesetja Kganyago said the decision was unanimous. “In assessing this forecast, the MPC noted a range of risks. Inflation expectations have moderated in the latest survey. This is welcome, but two-year ahead expectations are still in the top half of our target range,” Kganyago said. He said expectations are projected to ease towards the 4.5% objective as inflation slows.
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  • BRICS development bank aims to make $5 bln in loans in 2024

The New Development Bank (NDB), set up by the BRICS group of emerging economies, aims to make about $5 billion in loans this year, its vice president, Zhou Qiangwu, said on Tuesday.
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  • S. Africa’s consumer confidence improves in the first quarter, survey says

South Africa’s first-quarter consumer confidence improved on the back of an uptick in the confidence levels of high-income households, suggesting retail sales volumes could gradually start to recover, according to a survey released on Monday.
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  • February salary surge indicates positive trend for yearly pay increases in SA

The monthly BankservAfrica Take-home Pay Index (BTPI) experienced another positive month in February amid the better-performing environment, resulting in companies increasing their employees’ average salaries over the last three months.
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  • Zambia State Pension Fund to Bankroll $650m Copper Route

The National Pension Scheme Authority will be the major lender to a project upgrading the 203-mile Lusaka-to-Ndola road to a double lane, NAPSA Director- General Muyangwa Muyangwa says. Pension fund will inject $300 million into project; other lenders include Macro Ocean Investment Consortium and Workers’ Compensation Fund Control Board, NAPSA spokesman Cephas Sinyangwe says.
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  • Zambia Agrees $3 Billion Eurobond Deal in Debt Breakthrough

Zambia has agreed to restructure $3 billion in eurobonds, clearing a key hurdle that’s delayed its three-year effort to escape debt default with implications for other nations seeking creditor deals. Monday’s announcement marks a much-needed success for the Group of 20’s Common Framework, which was unveiled in 2020 to help poor countries overhaul borrowings from all creditors including sovereigns, bondholders and commercial banks, but has been criticized for taking too long.
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  • Zambia Debt Revamp Focus Turns Back to China After Bond Deal

Zambia’s three-plus-year slog to escape default is shifting to $3.5 billion in commercial debt mainly owed to Chinese lenders, after it finally struck a deal with holders of its eurobonds. Among the loans Zambia still needs to revamp are $1.9 billion borrowed from state-owned creditors in China including Industrial & Commercial Bank of China Ltd. and China Development Bank, according to a person familiar with the situation.
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  • Zimbabwe’s Inflation Surges as Finance Chief Pledges to Act

Zimbabwean annual inflation surged to a seventh-month high,days after the  finance minister pledged to address price increases that are being fueled by the  nation’s free-falling currency. Annual inflation quickened to 55.3% this month from 47.6% in February, the Zimbabwe National Statistics Agency said Wednesday in an online briefing. Prices rose 4.9% in the month, compared with 5.4% in February.
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  • Zimbabwe, Zambia to retender 2,400MW hydropower project after procurement difficulties

Zimbabwe and Zambia are retendering a $5bn project to build a hydropower plant on a shared river after the latter said the project is overpriced. The original tender to build a 2,400-megawatt (MW) facility across a gorge on the Zambezi River was awarded in 2019 to US giant General Electric Co. (GE) and Power Construction Corp. of China (PowerChina). However, Bloomberg reported on March 25 that the two southern African neighbours expect to select new bidders by September 2025.
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Central Africa

  • Cameroon Upgraded to B- by S&P

Cameroon’s long-term foreign currency debt rating was upgraded by S&P to B- from CCC+. Outlook remains stable. We project Cameroon’s real GDP will expand by slightly more than 4% on average until 2027. This is due to strong performance in services, mining, liquefied natural gas (LNG), and agribusiness, as well as public infrastructure investment.
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  • MTN Cameroon sees record growth with CFA325.7bn revenue in 2023 amid market challenges

MTN Cameroon reported a robust revenue of CFA325.7 billion for 2023. According to data released on the Johannesburg Stock Exchange in South Africa, this figure marks a 10.9% increase from 2022, showcasing a notable acceleration in growth and performance. Analysis by Business in Cameroon reveals that revenues rose by 8.7% in 2022, 2.2% less than last year.
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  • Bank of Central African States Keeps Benchmark Rate at 5%

The Bank of Central African States projects inflation rate at 5.5%, above the 3% target of the Central African Economic and Monetary Community, Yvon Sana Bangui, the bank’s new governor, tells reporters in the capital, Yaounde. The sub-region’s economy is forecast to grow 3.6% in 2024 from 2.2% last year. Growth will be boosted by non-oil activities with a projected rate of 4.1% against 3.1% in 2023.
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Central Africa Republic

  • Angola and African Union addressed situation in DRC

The president of Angola, João Lourenço, and his counterpart of Mauritania, Mohamed Ould Ghazouani, in his capacity as acting president of the African Union (AU), addressed today the situation in the Democratic Republic of Congo (DRC). Both leaders spoke by telephone, according to the Angolan Presidency, and during the dialogue the Mauritanian head of state expressed his support for Lourenço’s mediation efforts to restore peace in the DRC.
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  • Nestlé Unit to Pour $20 Million Into Congo’s Coffee Sector

Swiss food and drinks giant Nestlé (NESN.SW) unit Nespresso will invest $20 million in the Democratic Republic of Congo’s specialty coffee industry. The investment covers coffee purchases, price premiums, technical assistance, community projects and support services.
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