August 9, 2024/United Capital Research
Anglophone West Africa (WAEMU)
Nigeria
- Public debt stock may hit N130tn by Dec
Nigeria’s public debt stock is projected to hit N130tn this year, raising concerns about the country’s debt-to-gross domestic product ratio. Nigeria’s public debt stock, which includes external and domestic debt, stood at N121.67tn in the first quarter of 2024, up from N97.34tn in the fourth quarter of 2023, indicating a growth rate of 24.99% on a q/q basis.
- Customers’ deposits rise to N136tn in Q1
The value of customers’ deposits in banks has risen to N136tn as of the end of the first quarter of 2024. In Q1 2024, the banking sector recorded an inflow of about N21tn in new deposits to push the sector’s total deposits to about N136tn, on course to surpass the 2023 financial year’s performance, which stood at N115tn. Total deposits in the banking sector rose by 63% from about N70.5tn in 2022 to about N115tn in 2023 and hit about N136tn in March 2024, representing an increase of 18.26% in three months.
- Foreign firms win tenders for Nigeria’s new crude oil
Spanish oil giant, Repsol, has won the tender for the initial cargo of 950,000 barrels of Nigeria’s new low-sulphur crude oil blend, Utapate. Gulf Transport and Trading, another leading crude oil dealer, secured the cargo tenders for August and September 2024. Utapate, located offshore Akwa Ibom State, has current crude oil production of 28,000 barrels per day, with the potential to increase it to 50,000 barrels per day, adding that the sulphur content of the new crude is 0.0655%.
- CBN okays Unity-Providus merger, SEC review next
The Central Bank of Nigeria (CBN) has okayed the merger of Providus and Unity Bank, as both financial institutions await the approval of the Securities and Exchange Commission. While granting permission, the apex bank also approved financial support totaling N700bn to the new entity to be repaid with an interest rate of 6%. The CBN said the support, structured as a 20-year term loan, will begin repayment after a five-year moratorium without giving further indication of the source of funds.
- CBN dumps 12-month forex policy with $876m auction
The Central Bank of Nigeria (CBN) has auctioned a total sum of $876.26mn to 26 qualified banks, who participated in the latest Retail Dutch Auction System undertaken by the apex bank. A total bid valued at $1.18bn was received from 32 authorized dealers banks while bids valued at $313.69m from six banks were disqualified. Of the disqualified bids. four banks submitted their bids after the cut-off time of 3:00 pm, while two banks did not provide bids in the template submitted.
Ghana
- Debt struggles continue despite restructuring — Fitch
Ghana’s economy is still faced with significant financing challenges despite the government’s debt restructuring activities, a recent report by Fitch has indicated. As a result, the rating agency kept Ghana’s rating at a level that indicates that the country is effectively in default on its foreign debts.
- Inflation expected to reach 15 per cent by end of 2024
Finance Minister and Member of Parliament for Karaga, Dr. Mohammed Amin Adam, has projected that Ghana’s inflation rate will reach 15% by the end of 2024. Dr. Amin Adam compared the current inflation rate to that of the previous National Democratic Congress administration, which recorded inflation rates of 17.7% in 2015 and 15.4% in 2016.
- Fitch Solutions predicts 7 per cent policy rate cut by BoG in 2025
Fitch Solutions forecasts that the Bank of Ghana’s Monetary Policy Committee (MPC) will reduce the policy rate by 7% in 2025. According to the agency, this reduction will be influenced by an anticipated average inflation rate of 16.2% in 2025, down from a projected 22.1% in 2024, due to improvements in Ghana’s foreign exchange market.
- We need $271.7 bn to expand roads — Finance Minister
The country needs an estimated $271.7 billion to achieve its target of expanding the road network from 78,401km in 2016, to 253,000 km by 2047. The target, which was captured in the Ghana Infrastructure Plan, is also to increase paved roads to 70 per cent while linking urban areas with multi-lane carriageways and constructing long-span bridges across the Volta Lake.
Francophone West Africa
Ivory Coast
- Cocoa Finishes With Sharp Gains on Reduced Cocoa Output in the Ivory Coast.
Cocoa prices Tuesday rose sharply for a second session, with NY cocoa posting a 1-1/2 week high. Lower cocoa production in the Ivory Coast, the world’s largest producer, underpins cocoa prices. Government data Monday showed that Ivory Coast farmers shipped 1.66 MMT of cocoa to ports from October 1 to August 4, down by -28% from the same time last year.
- Ivorian farmers boost rice yields with new crop.
Ivorian rice farmer, Francois Kasse Yao, once struggling with a single annual harvest, has seen his fortunes change with a newly introduced rice variety. The resilient crop promises larger yields and a potential doubling of his income.
East Africa
Kenya
- Kenya Surprises With First Rate Cut in More Than Four Years
Kenya’s central bank surprised financial markets by cutting its benchmark interest rate for the first time since early 2020, providing some respite to consumers who have become increasingly frustrated by the high cost of living. The monetary policy committee lowered the key rate to 12.75% from 13%. The East African nation is among a small group of African central banks, including Mozambique and Morocco, to cut interest rates this year. Its decision is supported by annual inflation slowing to a four-year low of 4.3% in July as the strong shilling helped to cool the prices of key imports such as some food items and fuel. That’s well below the 5% midpoint of the central bank’s target range at which it seeks to anchor price-growth expectations.
- Fitch downgrades Kenya after revenue policy reversal
Global credit ratings agency Fitch downgraded Kenya’s sovereign rating to “B-” from “B”, citing heightened risks to the East African country’s public finances after the government backtracked on key revenue measures following protests. Bowing to pressure from protesters, the Kenyan government had to withdraw its 2024/25 tax plan in June to raise $2.7 billion more in revenue. The plan was recommended by the International Monetary Fund (IMF) to address fiscal imbalances.
- Kenya private sector activity falls in July amid public unrest, PMI shows
Kenya’s private sector activity dropped in July, undermined by the effects of public protests against the government, which hurt confidence in the economy and disrupted some business activity, a survey showed. The Stanbic Bank Kenya Purchasing Managers’ Index (PMI) fell to 43.1 from 47.2 in June. Readings below 50.0 signal a contraction in activity. Protests in Kenya caused disruption to the private sector in July, leading to a marked deterioration in business conditions.
- State saves 1.3m borrowers from loan defaulters listing
Lenders have removed more than half of personal loan accounts from negative listing in the past five years to December 2023 on the back of key State interventions, including partial debt cancellation and outlawing listing of small ticket loans. Latest data from Creditinfo, one of the three licensed Credit Reference Bureaus (CRB) shows new individual negative listings-a tag given to loans reported to CRBs for being in defaults-fell by 1..27 million accounts to a new low of $933,551at the end of last year from $2.2 million in 2019, translating to a 57.7 percent reduction.
- Treasury eyes Sh78bn in new IMF budget support
The government is eyeing a drawdown of about $600 million (Sh77.9 billion) from the International Monetary Fund (IMF) when the institution’s executive board approves the seventh review of Kenya’s medium-term funding programme. Central Bank of Kenya Governor, Kamau Thugge, said that the IMF drawdown is part of the revised external borrowing target of Sh360 billion in the current year.
- Blacklisted loan accounts jump 97pc on costly credit
More than a quarter of loan accounts in Kenya have been blacklisted by Credit Reference Bureaus (CRBs) in a soft economy where costly credit has pushed thousands of borrowers into a debt trap.
- Congo Demands International Embargo on Rwandan Mineral Exports
Democratic Republic of Congo called for an international embargo of metal exports from neighboring Rwanda, whose government it accuses of using rebel groups to steal its natural resources. All mining products from Rwanda should be considered “blood minerals,” because their sale allegedly supports conflict in eastern Congo, Mines Minister Antoinette N’Samba Kalambayi said.
Tanzania
- EU to release 100bn/- for sectoral reforms in Tanzania
The European Union (EU) has announced a substantial financial payment of TZS 97 billion (EUR 33.12 million) as a grant to support the Government of Tanzania’s ongoing sectorial reforms. This disbursement is aimed at fostering socio-economic development and enhancing the resilience of Tanzanian citizens. The funding is allocated across five key sectors, each of which is crucial for the country’s growth and stability.
- Tanzania to raise Single Borrower Limit to boost investment
The Government of Tanzania is considering revising the current Single Borrower Limit (SBL) regulation as it aims to increase borrowing capacity for local investors. The SBL refers to a regulatory limit set by banking authorities or central banks on the maximum amount of credit exposure a bank can have to a single borrower or group of related borrowers.
- TIB Bank rebounds with 5.6bn/- profit in Q2
TIB Development Bank has marked a significant turnaround, emerging from a period of financial strain to report a net profit of 5.6bn/- for the quarter ending June. This represents a striking reversal from the 2.5bn/- loss recorded in the same quarter of the previous year, signaling both a robust recovery and promising future prospects for the government-owned institution. The bank’s latest financial statement, unveiled last week, highlights a substantial improvement in both interest and non-interest income.
- Tanzania economy to benefit from 206bn/- Iron ore deal
Tanzania is set to continue reaping big in the mining sector after signing 77milion US dollar (about 206.4bn/-) agreement to develop Maganga Matitu Iron ore project at Liganga in Ludewa District, Njombe Region. The project targets to produce at least 1.0 million tonnes annually and is expected to boost the country’s economic growth through industrial development.
Uganda
- ITFC provides $10mln in trade finance to Uganda Development Bank
The International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank (IsDB) Group, has extended a $10 million trade finance line to the Uganda Development Bank Ltd. The financing is intended to bolster industrialization efforts in Uganda and assist with job creation and poverty reduction endeavors. Additionally, it aims to advance development objectives in Uganda, support trade, and address the country’s developmental needs.
- Uganda cuts key rate as shilling recovery helps inflation outlook
Uganda’s central bank reduced its key lending rate by 25 basis points to 10.00% on Wednesday, saying a recovery in the shilling currency had led to an improvement in the inflation outlook. The shilling hit a record low in late February but has risen by more than 6% against the U.S. dollar since then, meaning there is less risk that a recent rise in inflation will prove to be persistent.
- Stanbic Bank PMI Reveals Robust Private Sector Performance
Uganda’s private sector reported a continued growth of new orders running into the fourth month at the end of July marking the start of the third quarter. The upturn was widespread across all five monitored sectors, with firms linking the expansion to new client wins. The headline Stanbic Purchasing Mangers’ Index (PMI), which tracks Uganda’s private sector operating conditions, rebounded to 53.7 during July from the dip of 51.9 posted for June after a high of 54.1 recorded in May.
- Uganda Inflation Rate Quickens to Over 1-Year High of 4%
The annual inflation rate in Uganda accelerated for the third month to hit a near one-year high of 4% in July 2024, up from 3.9% in the prior month. Main upward pressure stemmed from prices of education services, recreation & culture and health.
Southern Africa
South Africa
- South Africa moves to implement national health bill despite resistance
South Africa is moving ahead with implementation of the National Health Insurance (NHI) bill, President Cyril Ramaphosa said, despite strong opposition from within and outside government. The NHI aims to provide universal coverage through a major overhaul of South Africa’s two-tier system. Ramaphosa signed the bill right before the May election in which his African National Congress lost its parliamentary majority.
- South Africa business activity contracts again in July, PMI shows
South African private sector activity remained subdued in July amid weaker sales and increased supply-side pressures, a survey showed on Monday. The S&P Global South Africa Purchasing Managers’ Index (PMI) rose slightly to 49.3 in July from 49.2 in June but remained below the 50 level which marks growth for the second month in a row.
- South African banks’ earnings in spotlight ahead of first rate cuts
South African banks report their half-year earnings from Tuesday, with the focus on whether credit impairments have peaked and on the interest rate outlook, with rates expected to fall in September for the first time since July 2020. Monetary policy has remained tight in Africa’s most industrialised economy with the Central Bank holding rates at 8.25% since May 2023 after a hiking cycle from late 2021.
Zambia
- Zambia’s proposed minerals law may hurt copper investment, mines lobby says
Zambia’s proposed minerals regulation law could deter investment and deliver a “fatal blow” to its goal of raising annual copper output to 3 million metric tons, two mining bodies said on Wednesday. Zambia, Africa’s second biggest copper producer, is proposing a Minerals Regulation Commission Bill that would allow the government to acquire a shareholding in exploration areas before licences to search for minerals including copper are granted to investors.
Central Africa
Cameroon
- World Bank Advises Cameroon to Collect More Tax and Spend Better.
Cameroon, the second-biggest economy in Central Africa, needs to improve tax collection and the quality of its public spending to spur growth, according to the World Bank. The oil producer reduced its fiscal deficit by about 5 percentage points over six years to just 1.1% of gross domestic product in 2022, mainly by cutting public investment, the multilateral lender said in a report. But well-targeted spending is necessary to stimulate growth, it said.
- Bold Fiscal Reforms Can Unlock Cameroon’s Full Potential
The World Bank today launched today two flagship economic reports: the 2024 Cameroon Economic Update and the Cameroon Public Finance Review. Entitled “Fiscal Instruments for Sustainable Forestry,” the economic update analyzes recent economic developments and presents the country’s medium-term outlook. Cameroon’s economic growth decelerated to 3.3% in 2023 from 3.6% in 2022, affecting all economic sectors due to lower-than-expected public investment, rising prices, and ongoing internal conflicts.
Gabon
- President Nguema invites Dangote to invest in Cement, Fertiliser production in Gabon
President Brice Oligui Nguema of Gabon has invited the President and Chief Executive Officer of Dangote Industries Limited (DIL), Aliko Dangote to invest in Cement and Fertiliser production in Gabon. The President urged Dangote to explore potential investment opportunities in the country’s cement and fertilizer sectors, specifically urea and phosphate production.
- US invites coup leader Nguema to discuss transition.
The United States Joe Biden administration has formally invited Gabon coup leader Brice Clotaire Oligui Nguema to Washington to discuss a return to civilian rule, The Africa Report has learned.
Equatorial Guinea
- GEPetrol to revitalize ExxonMobil’s former Zafiro field offshore Equatorial Guinea as African NOCs compete with IOCs.
Equatorial Guinea’s national oil company (NOC) GEPetrol has outlined a multi-phase development plan for the Zafiro Field, located the offshore Block B. The company will work towards increasing the flow of production at the field, leveraging its newfound position as operator of the block to bolster production and support economic growth.
