April 5, 2024/United Capital Research
Anglophone West Africa (WAEMU)
Nigeria
- Tinubu approves FCT’s N1.1trn 2024 statutory budget
The president has approved over N1.1trn statutory budget for the 2024 fiscal year for the FCT. The budget will impact on infrastructure development, healthcare facilities, as well as rehabilitation of schools in the FCT, amongst others. This comes on the heels of the FCT appropriation bill passing the second reading at the Senate last month.
- Public Debt: Nigeria’s largest creditors as of December 2023
The Debt Management Office (DMO) stated that total public debt in Nigeria is an estimated N97.34tn ($108.23bn) as of December 2023. This figure was an increase of 146.0% from N39.56tn ($95.77 bn) at the end of 2022. The major reason for the significant increase is the addition of CBN’s N20 trillion ($48 billion) in Ways and Means lending to the government and about 60.0% devaluation of Naira. Nigeria owes countries like China, France, Germany, and Japan (bilateral debts) and multilateral institutions like the World Bank, International Monetary Fund (IMF), Islamic Development Bank (IsDB) and the African Development bank (AfDB).
- Nigerians import fewer goods in Q1 2024 over duty fluctuations
The Nigeria Customs Service (NCS) has recorded a decline of 15,999 (about 5.0%) in the volume of Single Goods Declarations (SGDs) for imports in the first quarter of 2024. The total volume declined from 327,492 SDGs to 311,492 between Q1-2024 and Q1-2023. According to a document released by the agency Wednesday, there was also a bigger decline of 91,741 (about 23.0%) when compared to Q1-2022. The NCS blamed the fluctuating import duty for the major reason for the decline in the volume of SGDs.
- Nigeria hikes electricity tariff for bigger consumers in subsidy cut
Nigeria’s electricity regulator on Wednesday approved an increase in tariffs for better off consumers who use the most power as the government tries to wean the economy off subsidies to ease pressure on public finances.
Ghana
- Third tranche IMF funds expected in June
The government expects the third tranche of US$360mn from its programme with the International Monetary Fund to hit the accounts of the Bank of Ghana by June this year, Minister of Finance, Dr Mohammed Amin Adam, has indicated. With the IMF mission commencing its second review of Ghana’s programme April 2, the minister said he was confident the country would scale through the assessment to enable the Board of the fund to sit by June to approve the release of the funds.
- IMF staff arrive in Ghana for second review, third tranche talks
Ghana is set to undergo its second review of the three-year, $3bn IMF-supported post-COVID-19 Programme for Economic Growth (PC-PEG). Over the weekend, the mission staff from the IMF arrived in the country to commence the assessment of Ghana’s performance against the program’s objectives. This evaluation will span the next two weeks.
- Fiscal targets under threat — Suspension of electricity VAT creates GHC1.8bn gap
The government’s 2024 tax revenue target of GH¢143.1bn is under threat as it seeks to find alternative ways to make up for the potential GH¢1.8bn shortfall created due to the suspension of the 15% VAT on residential electricity consumers.
Francophone West Africa (WAEMU)
Senegal
- Senegal’s New Leader Announces Audit of Oil, Mining Industries.
Senegal will review agreements signed with natural-resources companies to ensure they’re optimized for the state to benefit, newly elected President Bassirou Diomaye Faye said. According to him, the government will undertake an audit of the mining, gas and oil sector that aims to strengthen the protection of local content for the benefit of the national private sector.
- Senegal’s New Leader Plans to Revisit Oil Deals with BP, Kosmos.
Newly elected Senegalese President Bassirou Diomaye Faye plans to revisit the contracts of oil and gas projects developed by BP Plc, Kosmos Energy Ltd. and Woodside Energy Group Ltd. in order to boost revenue for the state. The West African country is set to open the taps this year on the $4.8 billion Grand Tortue Ahmeyim liquefied natural gas project and Sangomar oil development after numerous delays, setting it up to become one of the world’s fastest-growing economies.
East Africa
Kenya
- Central Bank of Kenya keeps policy rate at 13pc despite falling inflation.
The Central Bank of Kenya (CBK) held its benchmark lending rate at 13.0 percent on Wednesday, its monetary policy committee (MPC) said, to allow inflation to continue declining to the desired level. The decision follows rate hikes in December and February that were aimed at stabilising the exchange rate and helping stubborn inflation to start falling. “The MPC noted that its previous measures have lowered inflation, addressed the exchange rate pressures, and anchored inflationary expectations,” the committee said.
- Kenya’s inflation falls in March
Kenya’s inflation fell in March compared with a month earlier, driven by falling prices of some food items and transport costs, the statistics office said on Friday. Inflation dropped to 5.7% year-on-year in March from 6.3% in February, the Kenya National Bureau of Statistics said in a statement. On a month-on-month basis, inflation was at 0.2% compared with 0.1% in February, the office said. The government has a preferred range for inflation of between 2.5% and 7.5% in the medium term.
- Kenyan private sector activity slows in March, PMI shows
Kenya’s private sector activity contracted slightly in March, hurt by cashflow problems at some businesses, a business survey showed on Thursday. The Stanbic Bank Kenya Purchasing Managers’ Index (PMI) fell to 49.7 in March from 51.3 a month earlier. Readings above 50.0 signal growth, while those below point to a contraction. In February, it was the first time since August that the figure had gone above 50.
- Kenya to cut 2024/25 spending plan by 12%, president says
Kenya will reduce its spending plan for the financial year starting this July by 12% to 3.7 trillion shillings ($28.35 billion), President William Ruto said, part of efforts to attain a balanced budget in the next three years. The East African nation’s currency and shares have climbed after it successfully issued a new $1.5 billion eurobond in February to finance the partial repurchase of another bond maturing in June. That move came in defiance of widespread expectations that it could struggle to access international markets.
- IMF Says Ongoing Review to Unlock Further Financing for Kenya
The International Monetary Fund plans to disburse additional financing to Kenya after completing an ongoing review of the nation’s program signed in 2021. A staff team is currently in Nairobi to assess Kenya’s performance under the $4.43 billion loan program.
- NSE Upgraded in New FTSE Russell Index Ratings
The Nairobi Securities Exchange (NSE) has been reclassified by the FSTE (Financial Times Stock Exchange) Russel Index from ‘Restricted’ to ‘Pass’, after it fixed delays in repatriating capital. This upgrade, which was received by the NSE from the FTSE Russell Index Governance Board in March 2024, follows a technical review of Kenya’s equity market. In a statement, the NSE said it had cleared previously reported delays in the ability of institutional investors to invest repatriate capital from Kenya.
- Debt service devours 84pc equivalent of tax revenue
The ratio of debt service to tax revenue in the eight months to February hit a new record of 84.4 percent, leaving very little for development projects as well as pushing the country deeper into debts. Exchequer data on public finance performance over the eight-month period revealed that tax revenue stood at Sh1.37 trillion while Sh1.16 trillion was paid to creditors.
- Bad bank loans hit record 15.5pc as CBK pauses rate increases
Non-performing loans (NPLs) have hit a new multi-decade high of 15.5 percent of the banking industry’s total lending as private sector credit growth softens. Central Bank of Kenya (CBK) data shows the industry’s ratio of gross NPLs hit a new high in 12 months to February 2024, rising from 14.8 percent in December last year to set the highest rate since mid-2006.
Tanzania
- Tanzania central bank raises key interest rate to tackle inflationary pressure
Tanzania’s central bank raised its key interest rate on Thursday to stay ahead of lingering inflationary pressure from global economic developments despite satisfactory local conditions, its governor said. The bank raised its key rate to 6.0% on Thursday from 5.5%. The Bank of Tanzania had announced a rate of 5.5% in January after announcing earlier that month it would start using a benchmark interest rate to signal its monetary policy direction.
- Govt commits to fast-track cross-border trade
The government supports East African Country’s initiatives to fast-track the smooth movement of people and goods across borders to promote the economy of the entire region and African continent. This was said by the Permanent Secretary for the Ministry of Industry and Trade Dr Hashil Abdallah in Nairobi on Tuesday at the Border Management Conference on crossborder trade. “We have agreed to continue improving the business environment to promote cross-border trade with the ultimate goal of stimulating the region’s economic growth,” he said.
- Private sector owns 70pc of financial sector
Bank of Tanzania (BoT) Governor, Emmanuel Tutuba said that 70 per cent of the financial sector in the country is owned by the private sector, thanks to the friendly business and economic environment put by the government. He attributed the private sector’s role in the financial sector to the enabling environment created by the sixth phase government under President Samia Suluhu Hassan.
- Tanzania’s Universal Health Insurance to kick off this April, government confirms
The wait for the planned Universal Health Insurance (UHI) is nearing its end. Deputy Minister for Health, Dr Godwin Mollel, announced that the UHI law will take effect before the end of April 2024, with a specific date to be confirmed soon. The implementation will take a phased approach given the fact that the UHI law offers such flexibility.
Uganda
- Uganda Inflation Rate Ticks Down to 3.3% in March
The annual inflation rate in Uganda eased slightly to 3.3% in March 2024, remaining close to a six-month high of 3.4% reached in the prior month. Costs increased at a slower pace for furnishings & household equipment (2.8% vs 3.1%), education services (11.1% vs 14.5%), restaurants & hotels (4.7% vs 6%), and personal care, social protection & miscellaneous goods (5.9% vs 6.1%). On a monthly basis, consumer prices rose by 0.5% in March, the same rate as in February.
- Renewed decline in business conditions as demand weakens in Uganda
Ugandan private sector firms registered a deterioration in business conditions during March, thereby bringing to an end a 16-month sequence of improvement in the health of the private sector. The overall decline was driven by renewed contractions in output and new orders, as customer demand was reportedly hampered by less money in circulation and reduced purchasing power.
- Bank of Uganda Downgrades 3 Tier 1 Banks to Credit Institutions
Three commercial banks in Uganda will transition from Tier I commercial banks to Tier II credit institutions, the Bank of Uganda said in a statement. This follows a recent increase in the minimum paid-up share capital requirement for Tier 1 Commercial Banks to UGX 120 billion (approx. USD 32.26 million) by the end of 2022, and to UGX 150 billion (approx. USD 40.32Million) by 30th June 2024. The three institutions, ABC Capital Bank, Guaranty Trust Bank and Opportunity Bank, now have three months to make the transition.
- Uganda to launch first domestic tin processing plant next month
Uganda will commission its first tin refining plant in the southwestern region next month, a senior mining ministry official said, as part of efforts to expand capacity and add value domestically to its minerals. President Yoweri Museveni wants to maximise the benefits of exports to the East African nation, where several gold refineries are operating, and Chinese-backed Sunbird Resources was recently licensed to mine limestone for cement production.
Southern Africa
South Africa
- Consumer spending growth in South Africa steadied in 2023
Consumer spending growth in South Africa steadied in 2023 after the previous year’s post-pandemic surge, but expected interest rate cuts will encourage more purchases in 2024, executives from Visa, and Discovery Bank said on Thursday. Releasing their latest SpendTrend24 report, Discovery’s banking unit and Visa said that while consumer spending in South Africa outpaced inflation by 19 percentage points in 2022, the two measures were closely matched last year.
- South African rand stable against softer dollar, stocks rise
South Africa’s rand was broadly steady against a softer dollar on Thursday, shrugging off a disappointing local survey that showed private sector activity in the country contracted in March. The S&P Global South Africa Purchasing Managers’ Index showed private sector activity fell to 48.4 in March from 50.8 in February as stronger price pressures and drought conditions affected customer demand. A reading above 50 shows growth.
- South African policymakers in talks on lowering inflation target – Kganyago
South African policymakers are in discussions on lowering the central bank’s inflation target, its governor said on Wednesday, adding that a lower target would make the country more competitive and bring the central bank in line with peers. Lesetja Kganyago told Reuters he personally preferred a decision that would lower the target from its current range of between 3% and 6% “before we get to 2025”, but that teams from the South African Reserve Bank (SARB) and National Treasury were still identifying the appropriate range and risks associated with it.
Zambia
- Zambia negotiating $3.3 bln commercial debt restructuring, after bonds deal
Zambia is in talks to restructure $3.3 billion of commercial debt, after reaching a deal with overseas holders of its sovereign bonds last week, an official said on Wednesday, as the country seeks to emerge from a three-year default.
Zimbabwe
- Hunger grips southern Africa as Zimbabwe declares drought a disaster
President Emmerson Mnangagwa on Wednesday declared Zimbabwe’s drought a national disaster and said the country needed more than $2 billion in aid to feed millions facing hunger. Mnangagwa’s statement follows similar announcements by Zambia in late February and Malawi in March, as drought induced by the El Nino global weather pattern triggers a humanitarian crisis in southern Africa.
