June 7, 2024/United Capital Research
Anglophone West Africa (WAEMU)
Nigeria
- External reserves fall by $1.8bn in 10 weeks
Nigeria’s foreign exchange reserves have fallen by $1.8bn in 10 weeks, according to data from the Central Bank of Nigeria (CBN). As of May 29, 2024, the country’s FX reserves stood at $32.69bn, down from $34.44bn as of March 18. This decline signifies a drop from the $36.1bn recorded in May 2023. The reserves have been declining steadily over the past few months, with a total decrease of $3.4bn since February 2024. Debt repayment recorded by the apex bank as of January 2024 was $560m, it reduced to $283.29m in February and then $276.16m in March 2024.
- CBN clears $831m foreign airlines’ trapped funds – IATA
The International Air Transport Association (IATA) has confirmed that the CBN has cleared foreign airlines trapped funds worth $831.0mn from June last year to date. IATA stated that the development had brought international airlines’ trapped funds globally to about $1.8bn. According to IATA, from the peak of about $850.0mn foreign airlines’ funds in Nigeria last June, only $19.0mn is left outstanding.
- FG has paid back N7.3 trillion of ways and means outstanding so far — Wale Edun
The Federal Government has settled a swooping N7.3tn in Ways and Means advances to the CBN. Consequently, the Minister of Finance stated that Nigeria is no longer reliant on borrowed funds for its projects, nor is it falling behind in its repayments to international creditors.
- Nigeria to strengthen trade with Korea after N3.4 billion exports in Q4 2023
Nigeria seeks to strengthen economic ties with the Republic of Korea, after exporting alloys and unwrought aluminium worth N3,400,420,000 to the country, late last year. This is amid the Korea-Nigeria bilateral trade(import) which reached about N304,619,077,676.23 in Q4-2023, making South Korea Nigeria’s 7th top import trading partner.
- FG mulls fresh N7.24tn loan to stabilise economy
The Federal Government may borrow an additional N7.24trn to fund an intervention plan aimed at reviving the economy. In the 2024 approved budget, budget deficit was N9.18trn, to be partly financed by N7.83trn in new borrowings. However, according to the Accelerated Stabilisation and Advancement Plan (ASAP), the government intends to borrow N9.18trn to fund its deficit in the year. The intervention financing will add N7.24tn to the debt, bringing the total for 2024 to N16.42tn. Debt financing is projected to cost N8.81tn.
- Low oil production threatening our ability to achieve 2024 budget revenue — FG
The Federal government has decried the impact of lower crude oil production volumes on its revenues and ability to achieve the N19tn revenue projection in the 2024 budget. According to the Minister of Finance, the Federal Government’s retained revenue for January and February 2024 was approximately 60% of the budget, largely driven by lower crude oil production volumes, running at 74.5% of the budget projection. He added if current revenue shortfalls persist, the revenue for 2024 is unlikely to exceed N15.8tn. This is as oil production currently stands at 1.4mbpd compared to 1.78mbpd budget assumption and OPEC Quota of 1.5 mbpd, resulting in federal government revenue shortfalls.
Ghana
- DDEP impacts BOG as bank seeks early recapitalization
The Bank of Ghana has been impacted by the Domestic Debt Exchange Programme (DDEP) as it seeks recapitalization from development partners, a report disclosed. The bank had signed a Memorandum of Understanding (MOU) to secure early recapitalization in the medium-to-long term. The report said a Memorandum of Understanding between the Bank of Ghana and the Ministry of Finance on how the recapitalization is to be executed is expected to be signed by the end of the third quarter.
- Ghana gets World Bank’s approval for $250 million loan
The World Bank has approved a $250 million International Development Association (IDA) credit for Ghana’s Financial Stability Project. According to a statement from the bank on Monday, this initiative is set to span five years and aligns with Ghana’s Financial Sector Strengthening Strategy (FSSS). The project aims to enhance financial stability by supporting the recapitalization of viable banks and Specialized Deposit-taking Institutions (SDIs) affected by Ghana’s Domestic Debt Exchange Program (DDEP).
Francophone West Africa
Ivory Coast
- Many Peaks raises A$5.2m to fund gold exploration in Côte d’Ivoire.
Many Peaks Minerals has completed a A$5.2-million equity raise within a 24-hour period from a small number of high-net-worth and institutional investors to accelerate exploration over an extensive area of gold-anomalous geochemistry with early but “very encouraging” drilling results at the Odienne and Ferke gold projects, in north-west Côte d’Ivoire.
- Cocoa Prices Rise on Support from Reduced Ivory Coast Shipments.
Cocoa prices are consolidating below Thursday’s 3-week highs and are trading higher. Cocoa prices have underlying support from dry conditions in West Africa that are causing an uncertain outlook for cocoa production in the region. Lower cocoa production in the Ivory Coast, the world’s largest producer, is a major bullish factor for cocoa prices. Government data Monday showed that Ivory Coast farmers shipped 1.46 MMT of cocoa to ports from October 1 to May 26, down by 30% from the same time last year. Trader Ecom Agroindustrial projects Ivory Coast 2023/24 cocoa production, which ends in September, will fall -21.5% y/y to an 8-year low of 1.75 MMT.
Senegal
- India Extends Broken Rice Export to Senegal, Gambia by 6 Months.
Exporters will be allowed to ship previously-decided quantities of broken rice until Nov. 30, according to a notification by India’s Directorate General of Foreign Trade on Wednesday. The government had allowed in November last year to export 500,000 tons of the grain to Senegal and 50,000 tons to Gambia in six months.
- Senegal Raises $750 Million Eurobond as Market Uncertainty Eases.
Senegal became the fourth sub-Saharan African nation to tap the market this year, with a bond sale that shows investors are gaining confidence in its new government. The emerging oil and gas producer raised $750 million of debt maturing in 2031 in two tranches at a coupon rate of 7.75%, according to data compiled by Bloomberg. The original $500 million was sold on Monday and increased by $250 million on Tuesday. JPMorgan Chase & Co. was the lead manager on the two portions, the data shows.
- Senegal President Makes Changes at Top of State Oil Company.
Senegal’s President Bassirou Diomaye Faye appointed Alioune Gueye as managing director of Petrosen Holding SA, according to minutes from the weekly cabinet meeting. Gueye, a chartered accountant, replaces Adama Diallo as the head of the state oil company Mouhamadou Diop, a polytechnic engineer of bridges and roads, was named managing director of Petrosen Trading and Services SA.
East Africa
Kenya
- Kenya’s Central Bank Keeps Interest Rates Unchanged on Strong Shilling, Declining Inflation.
The Monetary Policy Committee (MPC) of Kenya decided to maintain the central bank’s base lending rate at 13% following their meeting on June 5, 2024 Kenya’s inflation rate remained steady at 5.1% in May 2024, slightly up from 5.0% in April, which is within the Central Bank of Kenya’s target range Kenya’s foreign exchange reserves stand at $6.979 billion, providing 3.63 months of import cover.
- East Africa to lead continent in GDP growth into 2025 – report.
The report, indicates that 41 African countries are expected to experience stronger growth rates in 2024 compared to 2023. West Africa’s growth is forecast to increase from an estimated 3.6 per cent in 2023 to 4.2 per cent in 2024 and 4.4 per cent in 2025.
Rwanda
- IMF Approves $164m Funding to Rwanda.
The Executive Board of the International Monetary Fund (IMF) has today, May 22, 2024, approved a total funding of $164.6 million to Rwanda, a statement from the IMF has said. The announcement was made following a review of Rwanda’s implementation of the Policy Coordination Instrument, an IMF programme that supports countries to implement macroeconomic policies aimed at preventing crises and building buffers against external shocks.
- Rwanda Sees Drop in Unemployment Rates.
Rwanda witnessed a decline in unemployment rate in the first quarter of 2024, according to the latest Rwanda Labour Force Survey. The survey, released in May by the National Institute of Statistics of Rwanda (NISR) indicates that the unemployment rate decreased by 4.3 percentage points compared to the same period last year.
- Rwanda to Adopt Digital Currency in Two Years – Central Bank
Rwanda is looking to develop its own national Central Bank Digital Currency (CBDC) in the next two years, as part of the country’s efforts to streamline its financial system and position itself as an important player in the future of the global economy. The national digital currency, according to the National Bank of Rwanda (BNR), would offer Rwandans a safe, free, and easy alternative to physical cash. It would also expand financial inclusion by enabling more unbanked population to participate in the formal economy.
Southern Africa
South Africa
- South Africa’s financial system stable despite headwinds, central bank says
South Africa’s central bank said on Wednesday it expected the country’s financial system to remain resilient despite risks from worldwide elections, persistent geo-political tensions and weak domestic market conditions.
- Fuel price drop brings winter cheer to families and retailers in SA
Winter has officially arrived, and with it comes a welcome respite in fuel prices, just in time for the upcoming school holidays. Starting Wednesday, 5 June, South African motorists can look forward to a substantial decrease in fuel costs, easing the financial burden for families planning their holiday getaways.
- South Africa’s Inflation still expected around 5.0% y/y for CPI this year
While inflation moderated in April, to 5.2% y/y from 5.3% y/y in March, and 5.6% y/y in February, the descent has been slow overall since 2022, with inflation sticky, and inflation at times rising, and at risk of seeing further unevenness.
- South African Cabinet Shakeup Looms as Ministers Exit Parliament
South Africa’s cabinet is set to undergo a major overhaul after the ruling party lost its parliamentary majority in last week’s elections, with seven serving ministers losing out on a seat.
- South Africa’s Current-Account Gap Narrows More Than Expected
The deficit on the current account, the broadest measure of trade in goods and services, shrank to an annualized 1.2% of gross domestic product, or 84.6 billion rand ($4.5 billion) from a revised 2.3% of GDP in the prior quarter, the South African Reserve Bank said in a statement Thursday.
- South Africa’s financial system stable despite headwinds, central bank says
South Africa’s central bank said on Wednesday it expected the country’s financial system to remain resilient despite risks from worldwide elections, persistent geo-political tensions and weak domestic market conditions.
- South Africa’s financial system stable despite headwinds, central bank says
The Business Confidence Index rose to 35 in the second quarter from 30 in the prior three-month period, according to a report compiled by Rand Merchant Bank and Stellenbosch University’s Bureau for Economic Research.
Zimbabwe
- Zimbabwe’s Crackdown on Unofficial Market Drives ZiG Currency Transactions to Banks
A month-long drive by Zimbabwean authorities to curb the unofficial market for their new gold-backed currency, the ZiG (Zimbabwe Gold), is forcing transactions off the streets and into the banking system.
- Bravura expects to begin Zimbabwe lithium production in 2025
Bravura Holdings – a firm owned by Nigerian tycoon Benedict Peters – plans to start production at a Zimbabwean lithium project early next year, a company official said. The miner remains committed to commissioning the Kamativi lithium tailings project in 2025 despite the weak price of the battery metal, Bravura’s group general manager, Gbenga Ojo, told reporters on Tuesday.
- Zimbabwe Seeks ‘Deep Haircuts’ for $19 Billion Debt, Ncube Says
Zimbabwe wants steep reductions in debt values from creditors whom it cumulatively owes $19.2 billion, as part of efforts to reorganize arrears that are a weight on the economy.
- Zimbabwe Sees Deal for an IMF Staff-Monitored Programme in October
Zimbabwe sees the signing of an International Monetary Fund staff-monitored programme taking place in October, according to Finance Minister Mthuli Ncube. It will be the first time that the southern African nation will be placed under a programme overseen by the Washington-based lender in five years.
Zambia
- Drought Reduces Zambian Corn Harvest to 14-Year Low
Zambia’s corn harvest will drop 54% to the lowest since 2008, after El Niño brought the most severe dry spell on record earlier this year, wiping out crops.
- Zambia: Solid decline in output as power outages weigh on private sector performance in May
May PMI data signalled a further decline in business conditions across the Zambian private sector. The overall downturn softened to the weakest in 2024 so far, but drought and load shedding reportedly hampered output levels.
- Zambian President Names Mulambo Haimbe as Foreign Minister
President Hakainde Hichilema has confirmed Mulambo Haimbe as the substantive Minister of Foreign Affairs and International Cooperation, and appointed Princess Kasune as Justice Minister.
- Zambia Sees $388 Million IMF Boost as Bondholders Ratify Revamp
Zambia is set to get a boost from an extra $388 million in International Monetary Fund financing by the end of the month and the conclusion of a marathon $3 billion restructuring deal with bondholders.
- IMF Reaches Staff-Level Agreement on the Third Review of the Extended Credit Facility with Zambia
The International Monetary Fund (IMF) said on Tuesday that Zambia’s government had asked for its $1.3 billion loan programme to be increased to $1.7 billion to help it respond to a severe drought. The IMF and Zambia have reached a staff-level agreement on economic policies and reforms to conclude the third review of the Extended Credit Facility (ECF). The ongoing drought has created a more challenging economic environment.
- Zambian Inflation Edges Up as Drought and Weak Kwacha Bite
Zambia’s annual inflation rate accelerated further in May, fanned by currency weakness and the effects of an El Niño-induced drought, the worst in at least four decades. Consumer prices rose 14.7% this month, compared with 13.8% in April, Statistician General Goodson Sinyenga told reporters in Lusaka, the capital, on Thursday. Prices rose 1.4% in the month from 1% in April.
Angola
- Angola to Lease Three Production Plants Seized From Ex-General
Angola has opted to lease the businesses rather than selling them to avoid “overburdening” prospective investors because the firms require significant investments, Kalikemala said. The cement and brewery plants are operating below capacity, while the car assembly unit is idle, he said.
- IMF Expects Angola to Keep Monetary Policy Tight, Expansao Says
Angola should continue to tighten monetary policy until inflation falls to within the government’s target range, Angolan newspaper Expansao reports, citing the IMF representative in Angola.
- Angola Wealth Fund Sees 12% Portfolio Growth Over Five Years
Angola’s sovereign wealth fund expects its portfolio to expand by 12% over five years, benefiting from strong economic conditions in African markets in which it invests. In the near-term, the fund will have a “moderate return,” according to Armando Manuel, chairman of Fundo Soberano de Angola, or FSDEA.
Central Africa
Democratic Republic of Congo
- Timber Trade Across Uganda-DRC Borders Must Be Tightened, Minister Says.
Officials in Uganda say there must be tighter scrutiny and checks at entry points on the vast Uganda-Democratic Republic of Congo border in order to curb illicit trade and smuggling of timber logged from Congo Basin forests. The Africa Report revealed how non-rigorous customs checks and lack of scrutiny is fuelling cross-border trade of illegally logged timber and smuggling of timber from the Democratic Republic of Congo (DRC) into Uganda.
Gabon
- BW Energy confirms “substantial” oil discovery offshore Gabon following Hibiscus drilling campaign.
BW Energy has now concluded the drilling and the logging of the DHIBM-7P pilot well, confirming a substantial oil discovery with good reservoir quality and a material uplift to the Hibiscus area offshore Gabon. BW Energy’s preliminary evaluation indicates an increase in Hibiscus gross recoverable reserves (mid-case) of approximately 8 MMbbl of oil to 12 MMbbl of oil. The company plans to complete the well as a development well later in 2024.
