July 12, 2024/United Capital Research

Anglophone West Africa (WAEMU)
Nigeria

• Credit to government rises by N8.4 trillion in May 2024, dwarfs private sector credit growth

Credit to the government surged by 30.0% (N8.4trn) from N19.98trn in April to N28.38trn in May-2024. On a y/y basis, credit to government decreased by 8.0% from N30.71trn in May-2023 to N28.38trn in May-2024. Meanwhile, credit to the private sector increased by 2.0% from N72.92trn in April to N74.31trn in May-2024. However, y/y credit to the private sector rose at a higher rate of 66.0% from N44.79trn in May last year to N74.31trn in May-2024.
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• GTCO plans N400bn capital raise

GTCo Plc has announced a plan to raise N400.5bn by issuing 9.0billion shares at N44.5 per share as part of its strategy to fuel expansion and innovation. The proposal is awaiting regulatory approval.
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• FG approves 150-day duty-free window for importation of maize, rice, wheat

The Federal Government has approved a 150-day duty-free window to allow the importation of maize, husked brown rice and wheat as part of measures to combat rising food inflation in the country. Also, 250,000 metric tonnes of wheat and maize will be imported to fill the depleted strategic grain reserve.
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• NNPC plans to borrow another $2 billion crude oil-backed loan to boost economy

The Federal Government is planning to borrow an additional $2.0bn in crude oil-backed loans from international creditors to boost its financial inflow. This follows the recent revelation that NNPC is struggling to pay international oil traders a backlog of $6.0bn amid subsidy removal. According to Mele Kyari, the GCEO of NNPC, the cash raised would be used for all of NNPC’s business activities including supporting production growth.
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• Senate seeks to increase gold’s share of foreign reserve assets to 30%

The Nigerian Senate is evaluating a new bill aimed at increasing the proportion of gold in the country’s foreign reserve assets from 4.0% to 30.0%.  This move seeks to diversify the reserves away from reliance on the US Dollar and towards a more sustainable commodity. Currently, Nigeria’s reserves stand at $34.8bn, with gold accounting for only 4.0% as of the end of November. If the bill is adopted, the gold mining industry will be integrated into the formal sector and come under the jurisdiction of the Central Bank.
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Ghana

• Ghana gets green light for bond rework from official creditors

Ghana has cleared a key hurdle to restructure its international bonds, as its official creditors confirmed the proposed debt rework was not overly favourable to bondholders. The country clinched an agreement in principle with two bondholder groups to restructure around $13 billion of its international bonds in late June, making it the second African country after Zambia in recent weeks to reach the final stages of a debt overhaul.
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• Ghana consumer inflation slows to 22.8% year-on-year in June

Ghana’s consumer inflation slowed for a third consecutive month to 22.8% year-on-year in June from 23.1% in May, the statistics service said on Wednesday.  Government statistician Samuel Kobina Annim told a news conference that the June inflation was largely driven by a decline in non-food inflation which dropped to 21.6%, enough to mute an increase in food inflation.
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• Ghana drops from 51.6 to 49.7 on global Purchasing Manager’s Index

Worsening business conditions have caused Ghana to drop in the latest world’s Purchasing Managers’ Index (PMI). Ghana fell to 49.7 from 51.6 in the first six months of the year. The decline is attributed mainly to the Cedi’s depreciation against the US dollar.
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• GSE’s composite index makes 22.34% gains

The Composite index of the Ghana Stock Exchange increased by 2.02% in June, reaching 3,829.61 points. This brought the year-to-date gains to 22.34%. Additionally, the GSE Financial Stock Index saw a 3.04% increase, reaching 2,115.04 points, resulting in a ytd gain of 11.23%.
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• COCOBOD secures US$100m World Bank support for cocoa rehabilitation

The Ghana Cocoa Board (COCOBOD) has secured a US$100 million financing facility from the World Bank to rehabilitate old farms across six cocoa growing districts in the country. The beneficiary cocoa growing districts of the project include Assin Fosu, New Edubiase, Nkawkaw, and Juaso. The four-year project would support the cutting down of cocoa trees, which have lived 20 years and above, land preparations, and the provision of planting materials, including seedlings and suckers.
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Francophone West Africa (WAEMU)
Senegal

• Senegal Inflation Rate at 6-Month Low of 1.3%

The annual inflation rate in Senegal slowed for the third month to 1.3% in June 2024, the softest in six months, down from 2.1% in May, with the food price rising the least in six months. Also, prices moderated communications (1.7% vs 3.7% in May) and furnishings & household equipment (2.2% vs 2.5%). Prices accelerated for transport (1.1% vs 1.0%) and miscellaneous goods & services (3.0% vs 2.3%). Simultaneously, prices fell for housing & utilities (-0.3%, after being flat in the prior month) and recreation & culture (-0.2% vs 4.1%). On a monthly basis, consumer prices rose by 0.3% in June, the first increase in three months, after falling by 0.2% in the previous month.
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• Senegal’s population exceeds 18 million in 2023

Senegal’s population grew to 18,126,390 in 2023, according to figures released by the National Agency for Statistics and Demography on Tuesday. About 50.6 percent of the population are men and 49.4 percent are women, the figures showed. Of the population, some 75 percent are under 35 years old, about half are under 19 years old, and 39 percent are under 15 years old.
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Ivory Coast

• Soil moisture helps Ivory Coast’s cocoa main crop grow

Rains were below average last week in most of Ivory Coast’s main cocoa growing regions but the west African nation’s farmers said on Monday the soil was moist enough to help the next October-to-March main crop grow.The world’s top cocoa producer is in its rainy season, which runs officially from April to mid-November. Rains are typically abundant during this period but they have been scarce in the last several weeks.
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East Africa
Kenya

• Kenya’s domestic debt up by Sh577bn in a year

The government’s local debt expanded by 5.8 per cent during the fiscal year that ended last month, with new borrowings hitting Sh77 billion up from Sh545.2 billion acquired in a similar period the previous year. According to fresh data from the Central Bank of Kenya (CBK), the additional loan took the country’s domestic debt stock to Sh5.41 trillion as at the end of June 2024, up from Sh4.832 trillion at the end of June last year.
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• Moody’s pushes Kenya’s rating deeper into junk

Moody’s cut Kenya’s sovereign rating deeper into junk territory on Monday, citing diminished capacity to implement a fiscal consolidation strategy to contain its debt burden. The credit ratings agency downgraded the country’s local- and foreign-currency long-term issuer ratings and foreign-currency senior unsecured debt ratings to “Caa1” from “B3”.
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• Stanbic Sees Number of Kenyan Banks Halving On Higher Capital

Kenya’s plan to increase the minimum core capital for banks ten-fold could half the number of lenders in the East African nation, as some of these businesses merge their operations, according to Stanbic Holdings Plc. Raising the minimum capital requirement for the country’s banks to 10 billion shillings ($77.5 million) over three years will likely halve the industry.
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• Kenya Power to Begin Repaying Treasury Loans as Debt Break Ends

State-owned utility Kenya Power will resume loan repayments to National Treasury after a four-year moratorium ended on June 30, according to the Energy Principal Secretary, Alex Wachira. Notably, Treasury in 2020 agreed to the debt service break as part of measures to help improve Kenya Power’s working capital.
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• Kenya Shilling, Stock Market Outperform Global Peers in H1 2024

In the first half of 2024, Kenya’s financial markets saw a significant surge with the shilling and Nairobi Securities Exchange (NSE), outpacing global peers. Data compiled showed that the shilling surged 17.2%, becoming the best-performing currency worldwide, while bond market turnover doubled to KSh 781.8 billion. The NSE posted an impressive 50.4% growth in dollar returns, buoyed by a robust stock market rally and a significant increase in foreign investor participation, which rose to 65.6%.
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• Kenya & EU Seal Trade Deal

Kenya and the European Union (EU) have sealed an Economic Partnership Agreement, opening up duty-free and quota-free access for all Kenya’s exports to the $ 18 trillion EU market. The pact aims to boost bilateral trade in goods, increase investment flows, strengthen the ties between reliable partners, and facilitate mutually advantageous economic relations in a sustainable manner including stimulating job creation and economic growth.
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Rwanda

• Rwanda Inflation Rate Eases in June

The annual inflation rate in Rwanda eased slightly to 1.1% in June 2024, down from 1.3% in the prior month, with prices falling further for food & non-alcoholic beverages (-3.9% vs -3.5% in May). Moreover, a slowdown was observed in certain CPI items, including miscellaneous goods & services (3.7% vs 4.5% in May); restaurants & hotels (4% vs 4.4%) and transportation (22.9% vs 24.2%). On a monthly basis, consumer prices decreased by 0.6% in June, after falling by 1% in the month before.
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• Kagame expected to cruise to fourth term in Rwanda election

Rwandan President Paul Kagame is expected to cruise to a fourth term in office in an election scheduled for next week Monday against two opposition candidates who were cleared to run against him but have only modest expectations. Noteworthily, Kagame helped lead the rebel movement that ended the 1994 genocide in Rwanda and has served as president since 2000.
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• Rwanda Government Addresses Plans to Suspend UK Deportation Deal

The Rwandan government has acknowledged the UK’s decision to halt its controversial plan to deport asylum seekers to Rwanda in a new statement released late Monday. This marks the first official response from Rwandan authorities to the new Labour government’s intention to cancel the program. The new British Prime Minister Keir Starmer called the deportation plan “dead and buried,” criticizing it as a “gimmick.”.
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• Rwanda Stands Firm on £310 Million Migrant Deal with the UK, Declines Refund

Rwanda has reaffirmed its commitment to a £310 million migrant deal with the UK, which was recently scrapped by the UK’s new Prime Minister, Keir Starmer. Doris Uwicyeza Picard, an adviser to Rwanda’s Minister of Justice emphasized that Rwanda had fulfilled its obligations under the agreement and stated unequivocally, that “We are under no obligation to provide any sort of refund.”
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Uganda

• Uganda Is Latest African Nation Eying Gold as a Currency Shield

Uganda plans domestic gold purchases to build foreign exchange reserves and limit risks on reserve investments, becoming the latest African nation to turn to the precious metal to back up its currency. The Bank of Uganda said it will directly purchase bullion from artisanal miners in a move that will also support government efforts to support local miners and reduce imports of raw gold. Uganda’s move echoes a proposal by Nigerian lawmakers for the nation’s central bank to buy all locally produced gold to shore up reserves and fight inflation.
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• Airtel Uganda to sell shares left over from IPO

Telecom firm Airtel Uganda, a unit of India’s Bharti Airtel, said on Wednesday it plans to sell shares left over from its undersubscribed initial public offering to comply with regulatory requirements. Last year, the firm sold just 54.45% of the 8 billion shares in an initial public offering meant to raise 800 billion Ugandan shillings ($216.22 million). The goal was to comply with the Uganda’s broadband policy that mandates telecom firms to list at least 20% of their equity on the local bourse. The company is aiming to meet the target by November 2026.
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• Uganda Protests $40mn Fee as it Receives First Direct Oil Imports

Uganda is lobbying Kenya to lower the $40mn (~KShs. 5bn/UGX 147bn) bond fee for an undeclared surplus it shipped as it starts direct importation of refined petroleum products through the Kipevu Oil Terminal at the Port of Mombasa.  After some push and pull, Uganda got its way to import petroleum products directly through the Uganda National Oil Company (UNOC), without going through middlemen as was previously the case.
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Tanzania

• Tanzania Inflation Rate Steady at 3.1%

The annual inflation rate in Tanzania remained stable at 3.1% in May 2024, matching the rate from April and staying near three-year lows. Prices for personal care, social protection and miscellaneous goods and services recorded the biggest increase (8.2%), followed by housing and utilities (5.2%), transport (5%), recreation, sport and culture (3.4%) and alcoholic beverages and tobacco (3.4%). Food prices increased 1.6%, slightly higher than 1.4% in April. Compared to the previous month, the CPI edged up 0.1%, the smallest gain in seven months, after a 0.5% increase.
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• Tanzania central bank holds key rate, sees strong economic growth

Tanzania’s central bank left its key interest rate unchanged at 6%, adding that inflation expectations were well below target, the economy was growing strongly and exchange rate pressures were expected to ease. The Bank of Tanzania introduced a benchmark interest rate in January as part of a new monetary policy framework, first setting it at 5.5% before raising it to 6.0% in April.
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• Tanzanian Conglomerate Amsons Group Makes Record $180mn Bid for Bamburi Cement

Tanzanian conglomerate Amsons Group has made a record $180mn (KShs. 23.32bn) binding offer for 100% ownership of Bamburi Cement, valuing the listed cement manufacturer at Shs. 65 per share.
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South Africa
South Africa

• South African rand extends gains after U.S. inflation data

The South African rand extended its gains on Thursday after U.S. inflation unexpectedly fell last month, fuelling bets that the Federal Reserve may cut interest rates in September. The U.S. consumer price index dipped 0.1% in June after being unchanged in May, while the annual increase was the smallest in a year, data showed, reinforcing views that the disinflation trend was back on track.
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• South Africa energy minister vows change with ‘aggressive’ renewables rollout

South Africa’s new energy minister vowed on Monday to accelerate the shift to renewable energy from coal, breaking with a predecessor who opposed swift decarbonision and pledged to keeping burning coal for a long time. Owing to its reliance on coal-fired power stations run by state provider Eskom, South Africa is among the world’s top 15 greenhouse gas emitters – pushing out more than Britain, Turkey or France – and has the highest carbon intensity among the Group of 20 largest economies, according to watchdog Climate Transparency.
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Zambia

• Zambia mining firm to build 300 MW coal-fired power plant

Zambia’s Maamba Collieries will build a 300 Mega Watt (MW) coal-fired power plant costing an estimated $400 million over a two-year period from August 2024. ZCCM-IH said Maamba had reached an agreement with anchor lenders for financing the construction and installation of the plant.
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Zimbabwe

• Lower growth forecast for Zimbabwe as drought ravages crop yields

Zimbabwe has revised its economic growth forecast downwards as southern Africa’s worst drought in decades ravages crop yields, its finance minister told Reuters on Wednesday, but a bounceback in growth is likely in 2025. Finance Minister Mthuli Ncube said economic growth is forecast at 2% for 2024, down from 3.5% forecast in November, due to an El Niño-induced drought which has led to widespread crop failure.
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• Zimbabwe to Widen Carbon Industry to Trade with Other Nations

Zimbabwe is rushing to ready itself for a new era of carbon trading under a United Nations framework that allows countries to buy and sell carbon credits from each other, as well as companies, to help meet their climate goals. The government has started developing its policies and will finalize the Article 6 Policy Framework and Carbon Strategy at the end of the year in time for integration with its planned Climate Change Management Bill, Sithembiso Nyoni, the environment minister told reporters Thursday in the capital, Harare.
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Central Africa
Cameroon

• Cameroon’s president wins backing to delay legislative, local polls

Cameroonian President Paul Biya secured approval from lawmakers on Tuesday to delay parliamentary and local elections until 2026, a move opposition parties fear could make it harder for them to mount a challenge in next year’s presidential election. Lawmakers in Biya’s Cameroon People’s Democratic Movement have a majority in the National Assembly and voted in favour of the bill to extend their mandate by a year to March 2026. As a result, legislative elections – and municipal elections usually twinned with them – will take place after the 2025 presidential poll.
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• CAR seeks deeper military cooperation with Chad, Cameroon

The Central African Republic (CAR) has proposed the creation of a joint force with Chad and Cameroon to tackle rising insecurity in the central African region. CAR had convinced Cameroon, but Chad was not enthusiastic about working with CAR forces because of the presence of Russian mercenaries from Wagner Group.
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Democratic Republic of Congo

• Conflict in Congo Threatens Trade in Key Metals, UN Experts Say

Companies buying metal sourced from central Africa could be exposing themselves to United Nations sanctions for supporting war in eastern Democratic Republic of Congo, according to a report by UN experts. Congo’s trade in gold, tin and tantalum, a key mineral in portable electronics, is directly supporting armed groups involved in widespread human rights abuses and fueling one of the world’s deadliest conflicts.
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• DRC Sees 6.4 Million New Telecom Subscribers in 2023

The Democratic Republic of Congo (DRC) recorded 6.4 million new mobile subscribers in 2023, according to data from the Congolese Post and Telecommunications Regulatory Authority (ARPTC). The number of mobile subscriptions rose from 49.8 million at the end of 2022 to 56.2 million by December 31, 2023, marking a 12.8% increase. The mobile penetration rate increased from 52.35% to 59.1% during this period. Despite this growth, which has steadily risen from 37.3% in 2013, the penetration rate remains relatively low given the DRC’s large population of 95.2 million.
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