June 28, 2024/United Capital Research
Anglophone West Africa (WAEMU)
Nigeria
- FG spent $15bn on debt servicing in five years.
The Federal Government has spent a total of $15.55bn on debt servicing between 2019 and 2024. In 2019 $588.33mn was paid between January and May. Previously, $5.40 was paid in 2020, $2.02bn in 2021, $2.34bn in 2022 and $3.43 in 2023. Between January and May 2024, the country has paid $2.18bn.
- World Bank plans supervision mission over Nigeria’s underperforming $500 million electricity loan project.
The World Bank has announced a supervision mission next month (July 8th to 12th) in response to the underperformance of a $500mn loan aimed at improving Nigeria’s electricity distribution sector.
- NNPC shifts $700m gas pipeline delivery date to August.
The Nigerian National Petroleum Company Limited (NNPCL) has announced the shift of the delivery date of the Obiafu-Obrikom-Oben gas pipeline project, from March 2024 to August 2024. This is due to the failure of the various technologies deployed to achieve the construction of the 48-inch pipe under the riverbed between Ndoni in Rivers State and Aboh in Delta State.
- IMTOs to sell FX on CBN window.
The CBN has announced that eligible International Money Transfer Operators (IMTOs) will now have access to the official window to sell foreign exchange. This new development would enable IMTOs to access Naira liquidity at the official window, thus, enabling timely settlement of diaspora remittances.
- Ways and Means securitisation responsible for N24trn debt rise.
According to the Debt Management Office (DMO) the rise in Nigeria’s public debt stock from N97.34tn in December 2023 to N121.67tn in March is partly due to exchange rate fluctuations. Another major reason is the securitisation of N4.90tn as part of the securitisation of the N7.3tn Ways and Means Advances. There is also the interest rate, as well as new borrowing of N2.81tn as part of the N6.06tn provided in the 2024 budget.
Ghana
- Ghana clinches preliminary $13bn debt deal with bondholders.
Ghana has reached an agreement in principle with two bondholder groups to restructure around $13 billion of its debt, it said on Monday, making it the second African country this month to reach the final stages of a debt overhaul. The agreement will see Ghana’s bondholders forego about $4.7 billion of their loans and provide cash flow relief of about $4.4 billion up until 2026 when the country’s current International Monetary Fund programme ends.
- Bank of Ghana increases maximum advance payment for imports to $200,000
The Bank of Ghana (BoG) has announced an amendment to the rules governing Advance Payments for imports, increasing the maximum amount permitted from $50,000 to $200,000 per transaction. This change will take effect from July 1, 2024. According to a BoG’s notice, this adjustment aims to provide greater flexibility for importers and improve the efficiency of import transactions.
- Dividend dilemma: Ghana banks struggle despite recapitalisation progress
More banks may struggle to pay interim dividends to shareholders despite the permission granted by the Bank of Ghana following progress made in their recapitalisation efforts. During the recent Monetary Policy Committee (MPC) press conference, Dr. Ernest Addison, Governor of the Bank of Ghana, revealed that banks with stronger capital positions have been permitted to pay interim dividends.
Francophone West Africa
Ivory Coast
- Eni weighing €1bn sale of Ivory Coast exploration operations.
Italian oil giant Eni is in the early stages of deliberations for the sale of up to 30% of its Ivory Coast exploration operations, reported Bloomberg, citing sources. The potential deal could fetch approximately €1bn for the Milan-headquartered company.
- US government and Ivory Coast farmers seek delay over EUDR implementation.
The US government has joined a growing chorus of calls from farmers within the cocoa sector to the EU Commission for delaying the implementation of the upcoming EUDR regulations, reports Neill Barston. As reported by the Financial Times this week, the Biden Democratic administration’s Gina Raimondo and Thomas Vilsack, the respective American secretaries of commerce and agriculture believed the new legislation incoming this December tackling deforestation in supply chains including cocoa, faced ‘critical challenges’ to US producers.
Senegal
- AfDB, ICRC forge climate resilience alliance.
The duo has stressed the “importance of strategic partnerships” to reduce medium and long-term humanitarian funding gaps in Africa. The African Development Bank (AfDB) and the International Committee of the Red Cross (ICRC) are embracing co-creation to strengthen resilience in Africa. Following the signing of an agreement in December 2023, representatives of the two institutions met in Abidjan to review progress and further strengthen the strategic partnership.
- Woodside signs frame agreement for producing Sangomar field offshore Senegal.
Woodside Energy (Senegal) BV has let frame agreements to DeepOcean to provide subsea inspection, maintenance, and repair (IMR) services for Sangomar oil field offshore Senegal, West Africa. Sangomar deepwater oil field, which lies 100 km south of Dakar, Senegal, began production earlier this month (OGJ Online, June 10, 2024). The scope of work includes project management, engineering, and execution of subsea services such as inspection, survey, intervention, and maintenance, as well as additional services such as underwater inspection of FPSO (UWILD) and standalone ROV operations.
East Africa
Kenya
- Kenya’s Ruto Scraps $2.3 Billion Tax Plan After Deadly Protests
Kenyan President William Ruto said he’s withdrawn his support for a contentious tax bill and called on lawmakers to scrap it, bowing to public pressure after protests against the plan to raise $2.3 billion in new levies led to the deaths of at least 23 people.
- Kenya Dollar Bonds Deepen Losses as Ruto Abandons Tax Plans
Kenya’s sovereign dollar bonds extended losses after anti-government protests forced President William Ruto to scrap a $2.3 billion plan to balance the budget and make the country’s debt sustainable.
- Kenya’s Fiscal Challenges Persist as External Risks Ease
Achieving the deficit targets in Kenya’s budget proposal for the fiscal year ending June 2025 (FY25) will be challenging given social opposition, but the authorities have made significant progress in addressing the country’s near-term external funding constraints, says Fitch Ratings.
- After dramatic tax win, Kenyan protesters plot next moves
After their stunning success forcing the government to shelve $2.7 billion in tax hikes, young Kenyan activists are setting their sights higher, taking aim at deeply ingrained corruption and misgovernance.
Uganda
- Uganda Urged to Boost Health Public Spending for Productivity
Economic activity in Uganda has remained resilient despite multiple successive shocks, with real gross domestic product (GDP) accelerating from 5.3% in FY22/23 to an estimated 6% in FY23/24, a new World Bank report notes. The expansion was driven by oil-related construction activity and the growth of the mining and quarrying sector, which benefited from sustained increases in gold prices and an improved domestic environment for artisanal mining.
Tanzania
- Tanzania MOF Presents 2024-2025 Budget Speech
The Tanzanian Ministry of Finance and Planning June 13 presented the 2024-2025 budget speech. The speech explains measures that would: 1) apply withholding tax rates of 5 percent on payments to resident digital content creators…
- Hungary to Sign Air Transport Agreement with Tanzania
The Hungarian Official Gazette June 18 published Decision No. 57/2024 (VI. 18) ME, authorizing the Ministry of Construction and Transport to sign an air transport agreement with Tanzania.
- IMF signs off new $786 million Tanzania loan agreement
The IMF executive board approved a new loan program with Tanzania worth around $786 million on Thursday to help it “build resilience to climate change,” and also unlocked the latest tranche of money under an existing agreement.
Southern Africa
Angola
- Angola’s Rising Oil Exports Validate Decision to Quit OPEC
Angola is set to export the most oil in almost four years in August, demonstrating the African country’s motivation to leave OPEC. The nation’s shipments will jump to 1.23 million barrels a day, loading plans compiled by Bloomberg show. The Organization of Petroleum Exporting Countries had tried to set a limit of 1.1 million a day on Luanda, prompting Angola to depart the producer club. That curb was on the country’s output, which would be lower than its shipments.
South Africa
- South African Selloff Deepens as Cabinet Delays Spook Investors
Optimism sparked by South Africa’s election results is fading as a delay in the formation of President Cyril Ramaphosa’s new Cabinet makes investors worry how far it will erode the market-friendly government they had expected.
- South Africa Cabinet Talks Stall After ANC Pulls Trade Offer
Talks between South Africa’s two biggest political parties on forming a cabinet stalled after the African National Congress withdrew an offer to appoint a member of the smaller Democratic Alliance as trade and industry minister, people familiar with the matter said.
- South Africa producer inflation falls to 4.6% y/y in May
South Africa’s producer inflation fell to 4.6% year on year in May from 5.1% in April, statistics agency data showed on Thursday.
Zimbabwe
- IMF says Zimbabwe’s ZiG currency has ended bout of instability
The International Monetary Fund says the introduction of a bullion-backed currency by Zimbabwe in the second-quarter of this year has helped to end instability that had plagued the economy.
- Zimbabwe holds key interest rate at 20% with eye on inflation
Zimbabwe left its benchmark interest rate unchanged even as it sees inflationary pressures easing for the rest of the year under its bullion-backed currency. The central bank’s monetary policy committee kept the rate at 20%, Governor John Mushayavanhu, said Thursday in an emailed statement.
- ZiG, Zimbabwe’s new currency, gets its own code after two months
Zimbabwe’s new currency was assigned its own code, more than two months after it was launched in the southern African nation’s sixth attempt to introduce a stable unit.
- Zimbabwe to get 300 000-ton corn delivery to aid drought impact
Zimbabwe’s government expects to take delivery of 300 000 tons of corn this month to boost national reserves following a drought that reduced its harvest.
- Zimbabwe Ramps Up Nationwide Power Cuts as Kariba Water Levels Plunge
Zimbabwe has ramped up power cuts across the country as water levels at the world’s largest man-made reservoir plunged due to a an El Niño induced drought, reducing the amount available for electricity generation.
Zambia
- Zambia Inflation Soars, GDP Growth Slowest in 2 Years on Drought
Zambia’s annual inflation rate jumped to a 29-month high in June and the economy grew at its slowest pace in two years as the southern African nation continues battling the effects of an El Niño-induced drought, the worst in almost six decades.
Central Africa
Gabon
- Gabon closes pre-emption deal for Carlyle’s $1.3 bn Assala oil assets.
Gabon’s national oil company has completed its $1.3 billion acquisition of Carlyle Group’s oil assets in the country, the US private equity firm said. The audacious deal for the 45,000 b/d Assala Energy assets marked Gabon Oil Company’s successful pre-emption of Carlyle’s sale of the business to France’s Maurel & Prom, which sources familiar with the purchase expected to collapse due to shaky financing.
- BW Energy confirms oil discovery offshore Gabon.
BW Energy has confirmed a “substantial” oil discovery in the Hibiscus area offshore Gabon, following completion of the DHIBM-7P pilot well drilling and logging. The oil discovery with good reservoir quality is expected to significantly enhance the region’s oil reserves. As per the company’s preliminary evaluation, the discovery could increase mid-case gross recoverable reserves by around 8–12mbbl of oil.
