Image Credit: United Capital Report
July 26, 2024/United Capital Research
Anglophone West Africa (WAEMU)
Nigeria
- Forex inflow via IMTOs hits $1.07bn in three months
Foreign exchange inflows from International Money Transfer Operators (IMTOs) increased by 38.86% to $1.07bn in the first quarter of 2024, from $770.23mn recorded in the same period in 2023. in January 2024, the IMTOs recorded inflows worth $383.04mn, it dropped in February to $322.83m and returned upward in March to $363.70mn. When compared with Q4-2023, the inflows from IMTOs grew by 10.74%.
- W’Bank, AfDB to invest $7.5bn in Nigeria’s power sector
The Minister of Power, Adebayo Adelabu has disclosed that the World Bank and the African Development Bank have concluded plans to invest $30.00bn in boosting electricity in Africa, of this sum, Nigeria will get about 25.00%, being $7.5bn.
- CBN raises interest rate by 50 basis points to 26.75%
The Monetary Policy Committee (MPC) has raised the interest rate by 50 basis points from 26.25% to 26.75%. The MPC also pegged the Cash Reserve Ratio (CRR) for Deposit Money Banks at 45.0%, while that of Merchant Banks was put at 14.0%. The Liquidity Ratio was pegged at 30.0%. The Policy Makers also adjusted the Asymmetric Corridor around the MPR from +100 to –300 basis points around the MPR to +500 and –100 basis points around the MPR.
- Nigeria’s capital importation hits $5.92 billion in six months – Cardoso
The Governor of the CBN, Yemi Cardoso, has disclosed that capital importation has risen to $5.92bn between January and June 2024. When compared to same period last year, total capital importation upsurge by 234.0% from $1.77bn in June 2023 to $5.92bn in June 2024.
- Senate passes Finance Act amendment bill, increases banks’ windfall levy to 70%
The Nigerian senate passed the amendment bill of the 2023 Finance Act and increased the windfall levy on banks’ foreign exchange revaluation gains from 50.0% as proposed by the President to 70.0%. The senate also passed the amendment bill of the 2024 Appropriation Act to add N6.2tn to the 2024 budget for recurrent expenditure which includes payment of the new N70,000 minimum wage and renewed hope infrastructure projects across the country.
Ghana
- Ghana’s public debt hits GHC742bn from GH¢658.6bn
Dr Mohammed Amin Adam, the Finance Minister, has disclosed that the central government’s provisional total debt stood at GH¢742 billion (US$50.9 billion) as of June this year. This figure represents 70.6 per cent of the Gross Domestic Product (GDP).
- Ghana revises 2024 growth forecast higher as economy rebounds
Ghana’s finance minister raised the country’s 2024 growth forecast on Tuesday and said the West African nation was rebounding faster than expected from its worst economic crisis in a generation. Citing the positive impact of debt restructuring and reforms, Mohammed Amin Adam told parliament during a presentation of the mid-year budget that Ghana had “reversed negative trends,” and all indicators were looking better.
- Mid-Year budget review: Govt pays GHC12bn to bondholders
The government has paid GHS12 billion to bondholders under the Domestic Debt Exchange Programme in a move to stabilise Ghana’s economy and restore investor confidence. Presenting the mid-year budget review to Parliament on Tuesday, July 23, Finance Minister, Dr Mohammed Amin Adam emphasised the government’s commitment to fulfilling its financial obligations and ensuring economic stability.
Francophone West Africa (WAEMU)
Senegal
- US Injects $81 Million Into Senegal’s Hospitality Industry
US has injected $81 million in Senegal’s hospitality industry as it backs a government plan to boost tourism’s contribution in the economy. The US International Development Finance Corporation agreed to lend Dakar-based Vacap Hospitality SA $81 million to meet half of the money needed to develop a Marriott International Inc. project in the capital, Deputy US Secretary of State Kurt Campbell told reporters in Dakar.
Benin
- Marsa Maroc to operate two terminals at Benin’s Cotonou Port
Morocco’s main port operator Marsa Maroc has taken on a delegated management contract for two terminals at Benin’s Cotonou Port, according to a statement (pdf) published last week. Marsa Maroc was chosen in an international selection process led by Benin Manutentions SA, and an operating agreement will be signed “shortly.”.
East Africa
Kenya
- Kenya-Uganda kick off Kampala pipeline extension plan.
Kenya and Uganda have opened talks on the extension of the petroleum pipeline to Kampala, a major infrastructure development that will shape the region’s fuel imports market. This comes in the wake of own fuel importation by Uganda, which commenced in early July, ending an era of Kenya-controlled importation and supply of refined products for the landlocked country. The neighbouring country is importing oil products through a deal between the Uganda National Oil Corporation (Unoc) and Vitol Bahrain.
- State-owned Kenya Development Corporation to review interest on 1960s bad loans
A State-owned development financier is seeking to write off interest and penalties on defaulted loans tapped as far back as the 1960s that have ballooned to over Sh31 billion. The Kenya Developoment Corporation wants to apply the in-duplum rule, which provides that interest on a loan stops accumulating when it equals the principal, according to a management report seen by the Daily Nation.
- Sh21 billion coffee traded at Nairobi auction shipped to 55 countries.
Over 500,000 bags of coffee worth Sh21 billion traded at the Nairobi Coffee Exchange (NCE), were shipped to 55 countries in the last eight months. Between October 1, 2023 and June 28, the regulator says 585,066 bags of coffee were purchased by 45 dealers, and at the auction, 101,858 bags exported to America.
- Kenya’s Green Economy Could Create Nearly 240,000 Jobs By 2030.
Africa’s green economy has the potential of creating up to 3.3 million new direct green jobs on the continent by 2030, with the majority particularly in the renewable energy solar sector. According to the ‘Forecasting Green Jobs in Africa’ latest report by FSD Africa and Shortlist, a talent and impact advisory firm, Kenya is predicted to create between 40,000 and 240,000 green jobs by 2030.
- Debt servicing costs rise by Sh435 billion on weak shilling.
It cost taxpayers an extra Sh435 billion to service high public debt in the year to June 2024, as expensive foreign obligations – exacerbated by a weak shilling – came due. Latest data shows that the Treasury released Sh1.59 trillion to service domestic and external debt in the 2023/24 financial year, up from Sh1.16 trillion in the previous year.
Rwanda
- Rwanda’s Horticulture Sector Grows Through Horti-Export Phase 2, Targets Job Creation.
Rwanda’s horticulture sector holds huge potential in contributing to the country’s economic growth, specifically in increasing export revenues and creating decent jobs for youth and women. This was witnessed through the second phase of the Horti-Export project since 2021, which was funded by GIZ under its “Special Initiative – Decent Work for a Just Transition” which focuses on creating decent jobs and improving working conditions of workers within beneficiaries’ operations and beyond.
- Rwanda’s Savings Rate Reached 12% in 2023.
Rwanda’s savings rate as a percentage of gross domestic product (GDP) stood at 12.5 per cent by the end of 2023, dropping further to 11.3 per cent in the first quarter of this year. Rwanda had targeted to achieve a 23 per cent savings rate by the end of 2024, a target that seems unlikely given the negative trend that has been observed since the advent of the Covid-19 pandemic. The country’s savings rate had increased to 16 per cent in 2021, before falling to 15 per cent in 2022 and further in 2023 due to a combination of macroeconomic challenges that hit the Rwandan and world economy.
- How Rwanda Plans to Raise Rwf3tn Taxes in 2024/25.
The government, on June 29, promulgated a 2024/2025 state finance law under which Rwanda plans to spend a national budget of more than Rwf5.69 trillion for the fiscal year that commenced on July 1. According to the Ministry of Finance and Economic Planning, the budget is intended to sustain economic growth, bolster climate change mitigation efforts, and fund crucial investments in agriculture, private sector development, youth employment, energy, ICT, transport, and financial development.
Uganda
- Uganda’s economy shows positive outlook despite existing near-term challenges.
The Bank of Uganda’s recent State of the Economy report offers a snapshot of Uganda’s economic health and near-term prospects. The country is having a low and stable inflation environment and a stable exchange rate on account of a prudent monetary policy, coupled with robust Gross Domestic Product (GDP) growth, which is driven by increased household spending, public investment and rising net exports. However, several near-term challenges exist. The current account balance, while improving, is not fully financed by the financial account that has led to a drawdown in foreign exchange reserves of Bank of Uganda.
- Uganda central bank starts buying locally-produced gold to support forex reserves.
Uganda’s Central Bank has begun buying locally produced gold to bolster its depleted foreign reserves and tackle emerging challenges in international financial markets. The move could lower the country’s growing gold exports, whose shipments brought in $2.3 billion last year from $201 million in the previous year.
Southern Africa
South Africa
- South African central bank holds key rate but some members ready to cut
South Africa’s central bank kept its main interest rate unchanged for a seventh meeting in a row at 8.25%, but for the first time since September the decision was not unanimous. The South African Reserve Bank’s Monetary Policy Committee was split, with four members preferring an unchanged stance and two favouring a 25-basis-point rate cut. Monetary policy has remained tight in Africa’s most industrialised economy as the South African Reserve Bank (SARB) tries to steer inflation back towards the midpoint of its 3%-6% target range.
- South African inflation drops, rate cuts now expected in September
South African inflation slowed in June, statistics agency data showed, clearing the path for the central bank to cut rates at its next meeting, economists said. Headline consumer inflation stood at 5.1% year-on-year in June, compared to 5.2% in May, Statistics South Africa said. Inflation has remained above 5% for 10 consecutive months, while the South African Reserve Bank (SARB) prefers it to be at the midpoint of its 3%-6% target band.
- South Africa’s PPI Inflation Stable At 4.6%
South Africa’s producer price inflation remained steady in June after easing in the previous month, Statistics South Africa reported. The producer price index showed an annual increase of percent in June, the same as in May. The rise in overall annual inflation in April was largely driven by coke, petroleum, chemicals, rubber and plastic products, food products, beverages and tobacco products, metals, machinery, equipment, and computing equipment.
- 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.
- 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.
- South Africa to Lay Out Carbon Market Regulation Proposals
South Africa’s National Treasury plans to lay out its proposals for how to regulate carbon markets in the country in the next few months. The government department said it plans to publish a consultation paper on the industry around the time it presents its Medium-Term Budget Policy Statement in October.
Angola
- Angola central bank keeps interest rate steady, sees inflation easing
Angola’s central bank kept its main interest rate at 19.5%, citing a potential slowdown in inflation and an improvement in the supply of essential goods in the near term. The Bank of Angola had raised its main rate by 50 basis points at its last monetary policy meeting in May after hiking it by 100 basis points in March as it tried to rein in rising inflation which has topped 30%. Last month the annual inflation rate rose to 31.00% from 30.16% in May, but the pace of increase was slower than in previous months.
Namibia
- Land dispute threatens to derail Namibia’s energy hub plans
A dispute in Namibia over access to diamond-rich land around the town of Luderitz is now threatening to derail major energy projects, state and company officials said as the government steps up efforts to resolve the dispute. Any protracted delays may scare off investors at a crucial time for Namibia, as it aims to accelerate its first oil production following large offshore finds by TotalEnergies, Shell and Galp.
Zambia
- IMF Says Zambia’s Dedollarization Plan May Be Counterproductive
Zambia’s proposed ban on charging foreign currency in local transactions — punishable with 10-year jail terms — might defeat its own purpose, according to the International Monetary Fund. The central bank of Africa’s second-biggest copper producer in June unveiled the plans to curb increasing dollarization in the economy that it said blunts its tools to fight inflation. Businesses have already pushed-back on proposed regulations calling them “punitive” and warning that they could actually fuel price growth.
Zimbabwe
- ZIDA targets US$10bn investments
Zimbabwe Investment and Development Agency (ZIDA) is targeting to secure US$10bn investment commitments this year. Speaking on the sidelines of the Parliamentary Portfolio Committee on Budget, Finance and Investment Promotion familiarisation tour of ZIDA facilities, the agency’s CEO, Tafadzwa Chinamo said the target was attainable.
- Zimbabwe will stick to promises to build trust in new currency, central bank chief saysT
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.
- Zimbabwe’s Kuvimba signs $310mln agreement for lithium concentrator
The proposed lithium concentrator is crucial for the initial stages of lithium processing, which involves the crushing and leaching of ore to produce concentrates. These concentrates are then further refined into lithium carbonate or hydroxide, key components in battery production. The binding build, operate and transfer (BOT) agreement is set to establish a lithium concentrator at the Sandawana mine.
Central Africa
Cameroon
- Cameroon Public Debt Climbs to 43.3% of GDP
Cameroon’s public debt has reached CFA13,070 billion ($21.61 billion) at the end of June 2024, according to data from the national sinking fund CAA. This is equivalent to around 43.3% of GDP, up 0.8% compared to the previous quarter and 4.9% compared to the same period last year.
- Nachtigal Dam to Boost Power Supply in August with 120 MW Injection
In early August 2024, NHPC, the joint venture overseeing the construction of the 420 MW Nachtigal Dam in central Cameroon, will inject 120 MW into the southern interconnected grid, serving seven of the country’s ten regions. Following the first unit’s continuous delivery of 60 MW since June 10, 2024, the second unit of equal capacity was connected to the grid on July 16, 2024, according to NHPC insiders.
- Paul Biya Authorizes CFA616 Billion in Borrowing for 2024 Budget
Yesterday, Cameroonian President Paul Biya signed a decree authorizing Finance Minister Louis Paul Motazé to secure a total of CFA616 billion in loans for the state. This amount is allocated for “financing development projects included in Cameroon’s 2024 finance law and settling outstanding payments (invoices pending with the Treasury),” according to the presidential decree. Of this total, CFA280 billion is to be raised domestically, while CFA336 billion will be sourced from international markets.
- Wood Sector Sees 12.5% Spike in Production Costs by March 2024
Cameroon’s wood processing industry experienced a 12.5% year-over-year increase in production costs in the first quarter of 2024, according to the Industrial Producer Price Index (IPPI) by the National Institute of Statistics (INS). The INS highlighted that this “sharp increase” is nearly double the previous quarter’s rise of 6.2% year-over-year. Quarterly, these prices grew by 6.1%.
- Cameroon Factory Prices Rise 1.9% in Q1 2024 After Year-End Drop
Factory prices in Cameroon’s manufacturing sector increased by 1.9% year-on-year in the first quarter of 2024, according to the Industrial Production Price Index (IPPI) released by the National Institute of Statistics (INS). This marks a 1.2% rise from the previous quarter.
- Cameroon to Build Hydroelectric Plant to Supply North and Chad
n July 17 in Yaoundé, Théodore Nsangou, the CEO of Electricity Development Corporation (EDC), signed a contract with a consortium led by the French firm ISL. The deal will see the service provider conduct feasibility studies for a 250 to 300 MW hydroelectric plant at the base of the Mbakaou reservoir dam in the Adamaoua region for an undisclosed amount. The contract covers technical, environmental, social, and financial studies, expected to be completed by the end of 2024. The project is set to commence in 2025.
- Cameroon Allows Seizures of Livestock, Businesses, and More for Debt Recovery
Since February 16, 2024, Cameroon and 16 other member states of the Organization for the Harmonization of Business Law in Africa (OHADA) have authorized seizures of livestock, business assets, electronic money holdings, movable property belonging to third parties, and negotiable debt securities. This decision follows the revision of OHADA’s uniform act on simplified debt recovery procedures and enforcement measures.
- Cameroon spends CFA174bn on fertilizer imports in 3 years as local projects stall
From 2021 to 2023, Cameroon spent CFA 173.9 billion on fertilizer imports, according to data from the National Institute of Statistics (INS) in its annual foreign trade report. The imports surged by 76.2% in 2023, following an 82% increase in 2022, reported the agency responsible for Cameroon’s official statistics.
- Beac’s Latest Liquidity Offer Draws Strong Interest from Cemac Banks
On June 18, the Bank of Central African States (Beac) launched a CFA65 billion liquidity offer to banks in the Cemac region. The central bank revealed a strong response from credit institutions, with demand reaching CFA292 billion, over 449% of the amount offered.
