September 6, 2024/United Capital Research
Anglophone West Africa (WAEMU)
Nigeria
- Banks’ deposits with CBN hit N3.42tn
The deposits of banks with the Central Bank of Nigeria (CBN) hit a weekly high of N3.42tn at the end of last week, the highest in August. The deposits for the previous three weeks combined were N3.57tn. The next day following the announcement, banks had deposited about N1.09tn. This followed the announcement of the operationalisation of the Standing Deposit Facility asymmetric corridor to +500/-100bps from +100/-300bps. The SDF rate, applicable to deposits made by banks at the CBN, was increased to 25.75% while the Standing Lending Facility was adjusted to 31.75%.
- Forex crisis: Nigeria’s foreign trade payments crash by 57%
Nigeria’s Letter of Credit payments in the first seven months of 2024 have dropped by 57.04% to $391.91mn compared to $912.35mn in the same period of 2023. The highest LC payments this year were recorded in February at $102.59mn, followed by July at $79.65mn and $58.33mn in January. In March, LCs payments stood at $43.53mn compared to $269mn in the same month in 2023, rose to $54.02mn in April 2024 and dropped to $21.48mn in May before rising to $32.26mn in June.
- External debt servicing rises to $2.78bn
Nigeria’s debt servicing in the first seven months of this year rose by 53.63%, or $971.47mn, to $2.78bn, up from the $1.81bn recorded in the same period in 2023. CBN data showed that external debt servicing had gulped the highest amount in May at $854.36mn followed by $560.51mn in January and $542mn in July. Debt servicing in the other months of February, March, and April had stayed below $300mn with the lowest amount paid in June 2024 at $50.82mn.
- Banks extend N75.48tn credit to private sector
Banks’ credits to the private sector rose by 34% to N75.48tn in July, from N56.46tn in the prior year. On a m/m basis, banks’ credit to the private sector rose by about N2.29tn between June and July.
- Nigeria becomes World Bank’s IDA third-largest debtor, owes $16.5bn
Nigeria is the third-largest debtor to the World Bank’s International Development Association (IDA) as of June 30, 2024, following a significant increase in its borrowing from the institution. According to the World Bank’s latest financial statements, Nigeria’s exposure to the IDA surged by 14.4%, rising from $14.3bn in fiscal year 2023 to $16.5bn in fiscal year 2024. This $2.2bn increase marks Nigeria’s first appearance among the top three IDA debtors, up from its previous position as the fourth-largest borrower in 2023.
- Economic activities expand first time in 13 months
The latest Purchasing Manager’s Index (PMI) released by the Central Bank of Nigeria (CBN) has indicated that economic activities expanded in August for the first time in 13 months, as the composite PMI for August 2024 stood at 50.2 index points. The sectoral breakdown shows that the services sector recorded expansion for the third consecutive month, while the agricultural sector registered expansion for the first month. The industry sector, though contracted, registered a slower contraction when compared to the level recorded in the previous month.
Ghana
- Business and consumer confidence dip over rapid exchange rate depreciation
Exchange rate volatility in May 2024 led to a drop in business and consumer confidence. This is according to the Bank of Ghana’s (BoG) latest Monetary Policy Report. The Business Confidence Index dipped to 88.8 from 92.6 in the same comparative period as businesses expressed concern about the cost implications of the rapid exchange rate depreciation observed in May 2024.
- Africa is heavily indebted to the tune of 1.215 trillion dollars – GITFIC
Research undertaken by the Ghana International Trade and Finance Conference has revealed that the 54 member states of Africa are heavily indebted to the tune of 1.215 trillion dollars. It also mentioned Africa’s average inflation as 12.2 per cent, total population 1.34 billion people, total unemployment rate 7.7 per cent, average lending rate 19.5 per cent and average growth rate at 3.8 per cent.
- 2 banks commit GHC1.9bn to SMEs’ devt
The Development Bank of Ghana and the Exim Bank of Ghana are committing GH¢1.9 billion into the development of Small and Medium Scale Enterprises (SMEs) to promote rapid economic acceleration of the country. Similarly, the International Finance Corporation is also committing $400 million through financial institutions in the country to solidify the country’s position as a leading hub for entrepreneurship and investment.
Francophone West Africa (WAEMU)
Ivory Coast
- Ivory Coast Threatens to Cut CLSG Electricity Lines Over $US19.6M Unpaid Debt
The Boakai administration’s efforts to stabilize and expand Liberia’s electricity supply are facing a serious threat after Ivory Coast warned that it would cut off power to Liberia if the government failed to settle its substantial debt.
- Cote D’Ivoire Tax Agency Announces Payment Deadlines for Various Profits Taxes
The Ivorian Tax Administration Sept. 2 announced tax payment deadlines for industrial and commercial profits tax (BIC), agricultural profits tax (BA), and non-commercial profits tax (BNC), for the final third of taxes, or any minimum flat-rate tax (IMF), for financial year 2023.
Mali
- Senegal’s President Expected to Call Snap Parliamentary Vote
President Bassirou Diomaye Faye is expected to call fresh parliamentary elections in a bid to secure a majority and push through reforms after winning power earlier this year.
- Senegal Sets Up Body to Scrutinize Oil, Gas Contracts
Senegal’s government set up a commission to examine natural-resource contracts awarded to foreign investors and establish whether they comply with the West African nation’s laws, Prime Minister Ousmane Sonko said.
East Africa
Kenya
- China offers Africa $51bn in fresh financing, promises one million jobs.
Chinese President Xi Jinping on Thursday pledged $51billion (about Sh6.59 trillion in current exchange rate) in fresh financing to Africa, support for 30 infrastructure projects across the resource-rich continent and promised to create at least one million jobs.
- CBK seeks Sh30bn from reopened September bonds sale.
The Central Bank of Kenya (CBK) is seeking to raise Sh30billion from two re-opened bonds – a 10 and 20-year paper – whose sale started Wednesday until September 18. The 10-year paper has a coupon – interest rate set in the first auction – of 16 percent but investors will be free to quote higher rates in the current sale.
- Fading Protests Boost Kenya’s Private Sector Activity in August
The Stanbic Bank Kenya Purchasing Managers’ Index (PMI) Report indicates a mild recovery in business conditions during August as the impact of protests faded, allowing firms to broadly resume normal operations. The PMI rose from 43.1 previously recorded in July to 50.6 in August, posting above the 50 no-change mark for the first time since May, when the sector’s activity increased.
- SRC Chair Mengich Raises Concerns Over Kenya’s Bloated Wage Bill
Salaries and Remuneration Commission (SRC) Chairperson Lynn Mengich has termed the country’s wage bill as bloated, raising concerns over the current 43 percent public wage bill to revenue ratio. Mengich, who was speaking in an interview with Hot 96 on Wednesday, stated that the nation’s wage bill has been on an upward trend despite efforts by the government to cut down on its expenditure.
Rwanda
- Rwanda expresses interest in joining Kenya-EU economic partnership deal.
Rwanda has expreddes interest in joining Kenya’s Economic Partnership Agreement (EPA) with the European Union (EU), a top official said, becoming the first partner State of the East African Community (EAC) to do so. Ambassador Henriette Geiger, the Head of the EU delegation in Kenya, on Tuesday said that Rwanda has signalled its intention to join the deal.
Tanzania
- China to rehabilitate Tanzania-Zambia railway
China, Tanzania and Zambia signed an initial agreement to rehabilitate a decades-old railway aimed at improving the rail-sea transportation in resource-rich East Africa, Chinese state media said on Wednesday. President Xi Jinping witnessed the signing of the memorandum of understanding on refurbishing the 1,860 km (1,156 miles) Tanzania-Zambia Railway Authority (TAZARA) railway with the Tanzanian and Zambian presidents, who were in Beijing attending the Forum on China-Africa Cooperation, according to the state-run Xinhua news agency.
- Tanzania, Brazil Bilateral Trade Reach 203bn/-
The bilateral trade between Tanzania and Brazil has reached 74.8 million US dollars (203.2bn/-) in a decade, reflecting a steady growth of economic ties between the two countries. The increased trade volume is equivalent to 13 per cent increase in 12 years compared to the previous record of 66 million US dollars set in 2011. The Ambassador of Brazil to Tanzania, Mr Gustavo Nogueira, said last Friday during the Brazil-Tanzania business seminar that despite the current figures, there is potential for further expansion of the bilateral trade.
Uganda
- Uganda’s trade deficit widens despite increase in coffee exports
Last month, Uganda recorded a higher trade deficit as the value of imports increased to $247.9 million up from $92.58 million recorded in May this year, according to figures at the ministry of Finance, Planning and Economic Development and Bank of Uganda.
- Uganda’s Coffee Exports Go Up As Europe’share Hits 72 Percent
Uganda’s coffee exports have reached unprecedented levels, marking a significant boost to the nation’s economy and offering a promising future for its farmers. In July 2024, Uganda exported an astounding 821,593 60-kilogram bags of coffee, generating a revenue of US$210.48 million. This represents a 26.15% increase in volume and a remarkable 98.68% rise in value compared to the same month in 2023.
- Bullish bond market signals better times ahead for Uganda’s economy
It’s not very often that features of the economy of Uganda are truthfully spoken about as being full of vim and vigour. Not this time. Despite having a dismal Standard & Poor’s (S&P) credit rating of B-long-term, and B rating short-term, the economy’s outlook has been deemed stable. This is in part because of the government’s overreliance on the domestic debt market causing bond yields to rise. These yields and coupon rates are higher as the bonds’ lifecycles increase, causing a normal/ uninverted yield curve which for decades has been associated with a healthy and expanding economy.
South Africa
South Africa
- South African economy gains momentum but not as much as forecast
South Africa’s economic growth picked up in the second quarter, supported by higher consumer spending and power availability, but output declines in agriculture, mining and transport meant growth was slightly weaker than expected. Gross domestic product (GDP) expanded 0.4% in quarter-on-quarter seasonally-adjusted terms in April to June, above the first quarter’s flat output.
- South Africa business activity rises in August, PMI shows
South African private sector activity rose in August as firms received higher volumes of new orders for the first time since April 2023, a survey showed. The S&P Global South Africa Purchasing Managers’ Index rose to 50.5 in August from 49.3 in July, the first time it has been above the 50 point mark – which separates growth from contraction – in three months. South African businesses saw demand growth emerge in August, as customers increased their spending on the back of falling CPI inflation figures and a general optimism that economic conditions are stabilising.
- South Africa’s current account deficit narrows again in second quarter
South Africa’s current account deficit narrowed in the second quarter, to 0.9% of gross domestic product (GDP) from 1.5% of GDP in the first quarter, central bank data showed. In rand terms the current account deficit narrowed to 64.6 billion rand ($3.62 billion) in April-June, from 106.9 billion rand in the previous three-month period.
- South African business confidence gets boost from coalition government, survey shows
South African business confidence rose in the third quarter, helped by improving optimism about the business climate after the formation of a coalition government and stable electricity supply, a survey showed. The business confidence index rose to 38 points in the third quarter from 35 points in the prior quarter, according to the survey by the Rand Merchant Bank (RMB) and compiled by the Bureau for Economic Research.
- IMF says South Africa needs ambitious fiscal consolidation
The International Monetary Fund said that South Africa needed to pursue ambitious fiscal consolidation to restore the sustainability of its public finances. The statement follows an IMF visit to South Africa in early July to conduct a “post-financing assessment” after its $4.3 billion loan to the country in 2020 to help it fight the impact of the COVID-19 pandemic.
- South Africa’s Transnet gets 5 bln rand loan from BRICS bank
South African state logistics group Transnet on Friday agreed a 5 billion rand ($283.53 million) loan from the New Development Bank set up by the BRICS group of emerging economies. The loan will be guaranteed by the South African government, director general Duncan Pieterse told Reuters on the sidelines of a meeting of the New Development Bank being held in Cape Town.
Angola
- Angola weighs rival China, European financing bids to transform economy
China needs to step up its financing for Angola if the African nation is to absorb more Chinese-made goods from solar panels to electric cars, Angola’s finance minister said, as the former OPEC member considers vying bids from Beijing and Europe. China approved loans worth $4.61 billion to Africa last year, the first annual increase since peaking at $28.4 billion in 2016, when 68% of lending went to Angola alone, even as it began to turn off the cash spigot and move away from big-ticket infrastructure projects as resource-rich Africa struggles with a growing debt crisis and grasps for quicker financing solutions.
Zambia
- Zambia’s private sector downturn deepens in August
Zambia’s private sector business conditions declined significantly in August 2024, with the Stanbic Bank Zambia PMI falling to 48.3 from 49.4 in July. This drop indicates a continued contraction, driven by reduced activity, decreased new orders, and lower employment. Load shedding continued to strain capacity, resulting in increased backlogs of work.
- China to ‘revitalise’ ageing railway linking Zambia, Tanzania
China, Tanzania and Zambia signed an initial agreement to rehabilitate a decades-old railway aimed at improving the rail-sea transportation in resource-rich East Africa, Chinese state media said. President Xi Jinping witnessed the signing of the memorandum of understanding on refurbishing the 1,860 kms (1,156 mile) Tanzania-Zambia Railway Authority (TAZARA) railway with the Tanzanian and Zambian presidents, who were in Beijing attending the Forum on China-Africa Cooperation, according to the state-run Xinhua news agency.
Zimbabwe
- Unilever Zim exit: Failure to innovate or economic challenges?
After nearly eight decades of operating in Zimbabwe, Unilever, one of the multinational consumer goods giants, reportedly announced its intention to pull out of the country by the end of the year, joining other foreign-owned firms exiting the African markets.
- Zimbabwe turns to private firms to boost freight rail volumes
Zimbabwe’s state-owned railway operator has opened its network up to private players, including a unit of South Africa’s Grindrod, as it seeks to boost freight volumes that had collapsed after decades of underinvestment, an official said.
- Zimbabwe’s 40-tonne gold target may be elusive
Zimbabwe’s gold production increased by 33.5 percent in July, but the target of 40 tonnes set for 2024 cumulative production remains elusive. The country’s old sector continues to show sturdiness, with a significant growth in deliveries to Fidelity Refinery in July. Gold deliveries surged by 33.5 percent to 3.5 tonnes in July from 2.6 tonnes in June attributable mainly to improved production by the artisanal and small-scale miners segment.
- Banks reduce lending as crisis persists
The country’s banking sector is grappling with multiple challenges that have significantly constrained its ability to lend, according to the Bankers Association of Zimbabwe (BAZ). Among the primary issues are the absence of a lender-of-last-resort function for United States dollar-indexed transactions and a prevailing liquidity crisis in the market.
Central Africa
Cameroon
- Cocoa Drives 37% QoQ Surge in CEMAC Agricultural Export Prices in Q2 2024
Over the second quarter of 2024, global prices for agricultural products exported by the CEMAC countries rose significantly by 37% compared to the previous quarter. According to the Composite Index of Export Commodity Prices from these countries, cocoa was the main driver of this trend.
- Cameroon Adopts Geolocation Data Sharing to Meet New EU Cocoa Regulations
On August 28 in Yaoundé, the Cameroon Cocoa and Coffee Interprofessional Council (CICC) signed an agreement to share georeferenced data for cocoa and coffee farms. This step was taken in preparation for the European Union’s new deforestation regulation, which will soon come into effect.
- Aluminum Prices Rise 15.7% in H1 2024, Boosting Cameroon’s Alucam
The global price of aluminum rose by 15.7% between the first and second quarters of 2024. This increase, reported by the Bank of Central African States (BEAC) in its commodity price report for Q2 2024, is a significant jump from the 2.7% rise recorded between the fourth quarter of 2023 and the first quarter of 2024.
- Cameroon’s Oil Production Slows Down Secondary Sector in Q1 2024
Cameroon’s economic growth at the end of March 2024 was fueled by the strong performance of the primary and tertiary sectors. However, the secondary sector faced a slowdown, as highlighted in a report on national accounts published by the INS on August 29, 2024.
- Cameroon’s Timber Industry Slows as Export Taxes Soar
The Cameroonian forestry sector experienced moderate growth of 3.3% in the first quarter of 2024 compared to the previous year. This data, released on August 29, 2024, by the INS, indicates a significant slowdown from the previous quarter.
- Cameroon’s Consumption Slows in Early 2024 Despite Increased Government Spending
Between January and March 2024, Cameroon’s government spending on goods and services rose by 11.3%, according to a report on national accounts published by the INS. Despite this “significant increase,” which helped boost overall consumption in the country by 1.9%, the INS noted that consumption growth slowed compared to the 4% growth seen in the previous quarter.
