July 19, 2024/United Capital Report
Anglophone West Africa (WAEMU)
Nigeria
- Banks’ credits to private sector hit N375tn – CBN
Nigerian banks loans and support for the private sector rose to about N375.78tn in the first five months of 2024. This is about 74.98% higher than N214.76tn recorded in the same period in 2023, indicating that the banking sector has continued to provide increasing support for the economy. The data indicates that credit to the private sector rose by 65.9% or N29.52tn to N74.31tn in May 2024 compared with N44.79tn recorded in the comparable period of 2023.
- Nigeria’s inflation rises to 34.19% in June 2024
Nigeria’s inflation rate in June 2024 surged from 33.95% in May 2024 to 34.19% in June according to the latest report from the NBS. The headline inflation rate in June 2024 increased by 0.24% points in June when compared to the figure for May 2024. The headline inflation rate in June 2024 was 11.40% higher compared to June 2023, rising from 22.79%.
- FG seeks W’Bank’s assistance on $50m solar power project
The Federal Government has sought the assistance of the World Bank for $50.0m to support state governments in the installation of solar plants and infrastructure upgrades.
- Govt projects 500,000 metric tonnes of cocoa production by 2025
The Federal Government has stated that, it would boost its cocoa production to 500,000 metric tonnes by 2025 from the 340,000 recorded in 2022. Strategic partnerships with international organisations such as the International Cocoa Organisation and the African Cocoa Fund, among others, have been pivotal in this progress.
- Average FX turnover grew by 180% in one year – CBN
The average foreign exchange turnover grew by 180.47% in one year to $240.64mn as of the end of February. This is an increase from the average FX turnover of $85.80mn recorded in February 2023. M/m, average FX turnover on the official window rose by 131.59% in February to $240.64mn compared with $103.91mn in January reflecting increased trading activities in the foreign exchange market in the period under review.
- FG to tax banks 50% of realised profits on FX gains in amended 2023 Finance Act
The federal government plans to tax banks 50.0% of profit realised from foreign exchange revaluation in 2023. This is contained in the proposed amendments to the 2023 Finance Act sent by the President to the National Assembly for approval.
Ghana
- Food inflation inches up to 24 per cent
Food inflation continues to be a major concern for the country, with the rate increasing from 22.6% in May to 24% in June. Non-food inflation on the other hand dropped from 23.6% to 21.6% in June 2024. Overall inflation also eased to 22.8% from 23.1%, the lowest in almost two years.
- Ghana cocoa output is half of average with harvest almost complete
Ghana cocoa production reached 429,323 metric tons – or less than 55% of the average seasonal output – as harvesting neared completion at the end of June, data from marketing board Cocobod showed on Tuesday. Disastrous harvests in Ghana and Ivory Coast – the world’s biggest producer – have driven up global cocoa prices since the start of the year. Together, the countries account for around 60% of global supply.
- Ghana’s debt rework helps cocoa regulator post $149.8 mln profit
Ghana’s cocoa marketing board Cocobod made a 2.3bn cedi ($149.84mn) profit in 2022/23, helped by the restructuring of its debt, the west Africa nation’s auditor general. The cocoa regulator posted its first profit after six straight years of losses.
- Fuel prices cross GH¢15 per litre
Some oil marketing companies (OMCs) have begun upwardly adjusting their prices at the pumps following the commencement of July’s second pricing window. The Chamber of Petroleum Consumers (COPEC), ahead of the second pricing window for July, predicted a 4% rise in petroleum product prices effective Tuesday, July 16, 2024.
Francophone West Africa
Guinea-Bissau
- Guinea-Bissau and China sign a strategic partnership agreement.
China and Guinea-Bissau have elevated their ties into a strategic partnership. The deal was made during a three-day visit to Beijing by President Umaro Sissoco Embaló of Guinea-Bissau and comes in the wake of new Chinese projects and investments in the West African nation.
- Guinea grants final approvals to Rio Tinto for $11.6bn Simandou iron-ore project.
The Simandou iron-ore mine and infrastructure project in Guinea has received the green light to proceed with the planned $11.6bn development after clearing all regulatory obstacles. Simandou is the world’s largest untapped reserve of high-grade iron ore, estimated at over 2bn tonnes. The mining concession at Simandou is divided into four blocks.
Ivory Coast
- Côte d’Ivoire 2nd Reviews Under Extended Arrangement Under the Extended Fund Facility and Under the Arrangement Under the Extended Credit Facility.
Côte d’Ivoire’s economy remains resilient against a still difficult global backdrop. The EFF/ECF-supported program approved in May 2023 (400 percent of quota), has helped to safeguard macroeconomic stability, as well as a moderate rating of debt distress, while growing challenges from climate change are being addressed under the recently approved RSF arrangement (150 percent of quota).
- Ivory Coast tilts economy from farming to natural resources.
The discovery of huge deposits of natural resources including oil, gas and gold in the Ivory Coast is pushing the country’s economy in a new direction as it explores its underground potential. Over the last three years, the West African country — traditionally focused on agriculture, in particular cocoa — has leaned into a new role as an oil and gas producer. Three discoveries of oil deposits were made in September 2021, July 2022 and February this year, revealing huge reserves estimated at six billion barrels.
- Montage Gold awarded mining permit for Côte d’Ivoire project.
Montage Gold Corp. has reported that the Council of Ministers of Côte d’Ivoire has announced that it has awarded the mining permit for the Koné project to Montage. Martino De Ciccio, CEO of Montage, commented: “We are delighted to be awarded our mining permit which represents a significant milestone in the development of our Koné project and reflects the strong support received from our local stakeholders given our win-win approach focused on local content”.
East Africa
Kenya
- Kenya to cut spending in revised budget after tax-hike rollback
Kenya’s government plans to cut 2024-25 spending by 1.9% and widen the fiscal deficit to 3.6% of GDP in a revised budget, the treasury said, weeks after it was forced to roll back tax hikes due to mass protests. President William Ruto last week fired almost his entire cabinet and pledged to set up a broad-based government in his latest concession to demands from protesters.
- State freezes Sh15 billion power connection plan
The government has shelved a Sh14.6 billion project that aimed to connect public institutions and offices to the national power grid following the withdrawal of the Finance Bill, 2024 which has left a big hole in the State’s budget. The Treasury has cut the State Department for Energy’s budget for the 2024/25 fiscal year by Sh18.5 billion down to Sh14 billion from the Sh32.5 billion that the exchequer had initially allocated last monh.
- KenGen to add 42.5MW solar power to national grid by 2027
Kenya Electricity Generating Company (KenGen) targets connecting a new 42.5-megawatt solar power plant to the national grid by 2027 in the race to grow the share of renewable energy used. KenGen plans to build a floating solar power plant at it Seven Forks dams to increase the generation of renewable electricity. The plant will become the country’s second-largest solar plant, behind the 54.65-megawatt Garrissa Solar power plant, which the Rural Electrification and Renewable Energy Corporation developed.
- Treasury to spend Sh69bn on July external debt repayments
Kenya will spend about $533 million (S69 billion) servicing external debt this month, putting a fresh strain on forex reserves which were recently been replenished by the proceeds of a World Bank loan. Public debt data compiled by Bretton Woods shows that the biannual payments to China for the loans contracted from 2014 towards the construction of the standard gauge railway will account for 81 percent or $433 million (Sh56.1 billion) of the July external debt payments.
- Treasury cuts Ruto’s debt plan despite Finance Bill pressures
The Treasury now targets borrowing about Sh652 billion for the financial year 2024/25, watering down an earlier debt plan by President William Ruto. Whereas President Ruto had earlier in the month indicated that borrowings was expected to increase by Sh169.7 billion to cater for the revenue shortfall occasioned by withdrawing the Finance Bill, 2024, estimates by the Treasury show the borrowing will only be revised upward by 9.2 percent or Sh54.6 billion.
- IMF Reassures Kenya of Support after Cabinet Obliteration
The International Monetary Fund (IMF) has reassured the Kenyan government of support despite the recent developments that led to the withdrawal of the controversial Finance Bill 2024 and dismissal of the entire cabinet. The Finance Bill 2024 contained tax measures that were meant to support the 2024/25 budget cycle which includes debt servicing.
Rwanda
- Rwanda’s President Kagame re-elected in a landslide
Rwanda’s President Paul Kagame has been re-elected with 99.18% of the vote, the National Electoral Commission said on Thursday, extending his near quarter-century in office. The two men standing against him – Frank Habineza from the Democratic Green Party and independent Philippe Mpayimana – both conceded defeat in Monday’s election, which rights groups say was marred by a crack-down on journalists, the opposition and civil society groups.
Tanzania
- Tanzania targets ambitious $10 billion in investment capital
The Tanzania Investment Centre (TIC) has set an ambitious target of attracting nearly $10 billion in capital investments in 2024. This goal builds on five consecutive years of impressive growth in foreign and domestic investments, driven by favourable investment laws and incentives. TIC targets to register 1,000 projects, with $5 billion in foreign capital and $3.5 billion in domestic capital.
- 2024/25 Monetary Policy stance relatively tight
The Bank of Tanzania (BoT) has said the stance of Monetary Policy for 2024/25 will be relatively tight, responding to the path-through effects of the recent exchange rate depreciation and high oil prices on inflation. The Central Bank said in its latest Monetary Policy Statement (MPS) that it will execute this policy stance using the interest rate based monetary policy framework. In line with this, the Bank will review the Central Bank Rate (CBR) on a quarterly basis and use monetary policy instruments to steer the 7-day IBCM rate close to the CBR.
- WB new framework to consolidate Tanzania status
The World Bank Group‘s Board of Executive Directors has endorsed the new Country Partnership Framework (CPF) for Tanzania to support the country in consolidating its status as a lower middle-income country and achieving a high level of human development. The framework also aims at contributing to the World Bank Group’s (WBG) mission to end extreme poverty and boost prosperity on a livable planet.
- Imports decline, narrow current account deficit
Imports of goods and services have seen a decrease up to May this year, contributing to a narrowing of the current account deficit, according to the latest monthly economic review by the Bank of Tanzania (BoT). The BoT reported that imports of goods and services fell to 16.108 billion US dollars in the period to May this year from 17 billion US dollars compared to the same period last year.
Uganda
- Uganda cuts growth forecast for 2024/25 financial year
Uganda’s finance ministry reduced its economic growth forecast to between 6% and 6.5% in the 2024 – 2025 financial year that runs from July to June, it said on Tuesday, without giving a reason for the revision. In June, the ministry had forecast gross domestic product growth between 6.4% and 7% for the east African nation during the presentation of the budget for the current financial year. GDP stood at $53 billion at the end of June. The pace of economic activity during the period would be driven mainly by investments in several sectors including agro-processing, and oil and gas.
- Private sector outlook is positive
Uganda’s private sector continues to thrive despite higher utility, rent, material, and staff costs, according to the latest Stanbic Purchasing Managers’ Index (PMI). The PMI dipped from 54.1 in May to 51.9 in June, indicating continued growth but at a slower pace. The private sector in Uganda is showing remarkable resilience in the face of rising costs. The strong demand conditions are driving output and employment growth, and businesses are optimistic about the future.
- Prepare for higher interest rates, says BoU
Bank of Uganda’s June Monetary Policy Report shows money market rates continues to steadily increase due to tight financial conditions, signaling an increase in interest rates. Data from Bank of Uganda indicates that overnight interest rates rose to 11.8 percent in May compared to 10.4 percent in February, while seven-day interbank average rates rose to 12 percent.
- BoU to start buying gold domestically
Bank of Uganda has said it is in the process of initiating a Domestic old Purchase Programme to rebuild the country’s foreign reserves, amid a reduction in foreign currency inflows.
Southern Africa
South Africa
- South African retail sales rise 0.8% year on year in May
South African retail sales rose 0.8% year on year in May after rising by a revised 0.7% in April, Statistics South Africa figures showed. Sales fell 0.7% month on month in May after increasing by 0.5% in April.
- South Africa’s Ramaphosa urges green energy to avoid carbon border tax
South Africa’s President Cyril Ramaphosa warned other developing nations that future carbon taxes proposed by rich countries would damage their economies unless they act swiftly to ditch fossil fuels in favour of green energy. He noted that carbon intensity of South Africa’s economy, which relies heavily on burning coal to produce electricity, was unsustainable.
- S.Africa’s Transnet gets $1 bln African Development Bank loan
The African Development Bank (AfDB) has approved a $1 billion loan for South Africa’s Transnet to aid the troubled logistics firm’s recovery plan, the bank and the company said. State-owned Transnet has struggled to provide adequate freight rail and port services in South Africa due to equipment shortages and maintenance backlogs after years of under-investment. This has impacted commodity exports and other sectors such as manufacturing and retail, weakening Africa’s most advanced economy.
- Interest rates unchanged – but two MPC members wanted a cut
As expected, the SA Reserve Bank’s monetary policy committee (MPC) left interest rates unchanged at the highest level in 15 years. For the seventh straight meeting, the repo rate was kept at 8.25%. Four members of the MPC voted to keep rates unchanged, but two voted for a cut of 25 basis points. The committee assessed that an unchanged stance remained appropriate, given the inflation risks.
- SA’s high energy costs hampering mining industry, study finds
High energy costs are damaging SA’s mining industry, which accounts for about 8% of GDP, according to a study by Boston Consulting Group (BCG). The latest mining outlook report by the consulting firm noted that SA was grappling with a 4GW-5GW energy supply shortfall as a result of Eskom’s failure to invest in new capacity over an extended period.
Angola
- Angola: Inflation rises to highest level in over seven years in June
Inflation increased to 31.0% in June from May’s 30.2%. June’s figure marked the highest inflation rate since May 2017. Recently high price pressures have been fueled by surging agricultural prices, insufficient domestic food supply, a weakening kwanza and last year’s removal of petrol subsidies.
- Angola seeks to strengthen telecom partnership with China to accelerate digitalization
Angola is seeking to strengthen cooperation with Chinese telecommunications companies, aiming to utilize Chinese equipment and services to enhance the country’s internet infrastructure and accelerate digitalization, the Global Times learned from the Angolan Embassy in Beijing. Angola’s Ministry of Telecommunications, Information Technologies and Social Communication (MINTTICS) is strengthening partnership with their Chinese counterpart to “promote inclusive connectivity in communications and improve operator services,” the Angolan Embassy said, including the signing of new agreements.
- Republic of Congo Hydrocarbons Minister to Discuss Gas Monetization at Angola Oil Gas (AOG)
Both the Republic of Congo and Angola have outlined ambitious oil and gas production targets, representing strategic areas for bilateral investment and cooperation.
Zambia
- NAPSA pumps $200m into Maamba coal power project
NAPSA has signed a financing agreement with Maamba Collieries Limited to invest $200 million in form of debt to finance the firm’s 300MW coal power plant Phase II Project. The authority is projected to earn up to $107.6 million in interest from the project.
- We seized goods worth K4m in Q2 – LCC
The Lusaka City Council (LCC) has seized goods worth K4,238,200 in the second quarter of 2024. The council seized significant quantities of unfit food products which were unsafe for human consumption.
- Zambia seeks to strengthen ties with Croatia
Zambia is keen to strengthen cooperation with Croatia for the mutual benefit of both countries, the Zambian Foreign Ministry said in a statement. Patricia Kandolo, Zambia’s ambassador to Italy and accredited to Croatia on a non-residential basis, reiterated the good relations that exist between Zambia and Croatia, and underscored the need to enhance collaboration between the two countries, especially in the area of economic cooperation, said the statement.
Zimbabwe
- Zimbabwe will stick to promises to build trust in new currency, central bank chief says
Zimbabwe’s government will stick to what it promised when it launched a new currency in April by ensuring it remains fully backed by reserves, the central bank governor told Reuters on Wednesday, adding that was the only way to build trust. The new currency, called Zimbabwe Gold or ZiG for short, is the southern African country’s sixth attempt at a local currency in 15 years after a bout of hyperinflation under former leader Robert Mugabe.
- Zim to cut on token payments to creditors
Zimbabwe will approach the International Financial Institutions (IFIs) for some “deep haircuts” on quarterly token payments the country is making to external creditors to relieve itself from debt distress. The country’s total public and publicly guaranteed debt stock is estimated at US$21.1 billion, comprising external debt of US$13 billion and a domestic debt of US$8.1 billion.
- Starlink shakes Zim telecoms industry
Zimbabwe’s telecoms industry is set for a radical shake-up with the entrance of global satellite-based internet service provider Starlink, which is set to roll out its service in the local market in the third quarter of this year. In an effort to stay in business, some local telecom companies have cut the price of their internet packages ahead of Starlink ‘s launch.
Central Africa
Angola
- Surge in Angola: Inflation Hits 31% After 14 Months of Steady Climb.
June marked Angola’s inflation rate soaring to a significant 31%, continuing its upward trajectory for the 14th consecutive month. Driven mainly by steep rises in food and beverage prices, this trend highlights escalating costs that impact daily life. According to the Angolan National Institute of Statistics, this marks the highest rate seen since May 2017, showcasing a sharp increase of 19.75 percentage points from last year.
- Angola With the Highest Growth in the Last Nine Years.
Angola experienced, in the first quarter of 2024, the highest economic growth in the last nine years, with the successive slowdown in inflation. According to a government report, this performance is the result of the effect of exchange rate stability, the gradual withdrawal of fuel subsidies and the updating of public transport prices. Another factor pointed out in the document is the increase in the supply of nationally produced goods, as reflected in the Gross Domestic Product (GDP), which recorded its highest growth rate since 2015, with 4.6%.
- Angola to Sell Stakes in Biggest Insurer, Standard Bank Unit.
Angola will sell stakes in its largest insurer and in the local unit of Standard Bank Group Ltd. this year, as the oil-producing nation moves ahead with a privatization program to raise cash and diversify the economy. The disposal of stakes in state-owned insurer ENSA – Seguros de Angola SA is taking place now, while the sale of the holding in Standard Bank Angola should happen by November, Angolan Minister of State for Economic Coordination Jose de Lima Massano said. “We’re moving ahead with our privatization plan,” he said in an interview in the capital, Luanda, late on Tuesday. “Our goal is to build a market-based economy.”
- UAE Aims to Intensify Economic Relations With Angola.
The United Arab Emirates (UAE) has recently expressed its intention to intensify economic relations with Angola, investing in the energy, technology and maritime logistics sectors, ANGOP learnt from a press release disclosed Tuesday. It adds that in addition to these investments, there are also opportunities in the field of food security, through partnerships between the two countries and that the UAE sees Angola as a growing consumer market and emphasizes that several leading Emirati companies are already investing in key sectors of the Southern African nation’s economy, including the port sector, with companies such as ‘Masdar’, ‘DB World’, Abu Dhabi Ports Group, ‘Edge’ Group and ‘G42’.
- Central Bank of Angola Develops Strategies to Tackle Cyber Threats.
Exposure to cyber risks by banking institutions and the current modernization of the Angolan financial system, has forced the National Bank of Angola (BNA) to develop robust cyber security strategies, its deputy governor, Maria de Fontes Pereira, said Thursday in Luanda. Speaking at the opening of the conference on “Modernization of the Angolan Financial System,” promoted by the BNA, Fontes Pereira stressed that the strategy is based on data protection policies and incident response mechanisms.
DR Congo
- Congo/IMF: Civil society criticizes fund management.
The International Monetary Fund (IMF) Executive Board has approved the disbursement of approximately 43 million dollars to the Congolese government under the extended credit facility initiated in 2022. This approval comes after four reviews of the three-year program, highlighting the economic effectiveness of the structural reforms implemented.
- AfDB seeks to make voice heard on Inga III mega-dam.
The African Development Bank is seeking to take advantage of Australian miner Fortescue’s failed bid to lead the Grand Inga development by advocating for a reduced-scale project. A delegation from the pan-African institution is expected shortly in Kinshasa.
