October 4, 2024/United Capital Research

Anglophone West Africa
Nigeria

• Naira-for-crude deal begins 

The Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency, on Sunday, confirmed that the supply of crude in naira by the Nigerian National Petroleum Company Limited (NNPCL) to the Dangote Petroleum Refinery is to begin on Tuesday, October 1, 2024.
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• World Bank okays $1.57bn loan for Nigeria

The World Bank approved three new loan requests totalling $1.57bn in financing for Nigeria. The approval is to support the Federal Government in strengthening human capital through better health for women, children and adolescents.
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• Credits to govt rose by over N11tn in August

The Central Bank of Nigeria (CBN) disclosed that credit to the Federal Government increased by N11.33tn or 57.11% to N31.15tn in August from N19.83tn in July. The latest Money and Credit Statistics from the CBN revealed a trend of fluctuating borrowing by the three tiers of government from commercial lenders over the past months. n June, the credit figure stood at N23.93tn, up from N19.98tn in April, but lower than the N28.38tn reported in May.
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• FG introduces tax reliefs for deep offshore oil and gas projects

The federal government has introduced tax reliefs for deep offshore oil and gas projects in the country as well as VAT exclusion on LPG, CNG, diesel and others. The VAT Modification Order 2024 exempts key energy products like Diesel, LPG, CNG, and clean energy infrastructure, such as electric vehicles and clean cooking equipment, from VAT. The Notice of Tax Incentives for Deep Offshore Oil & Gas Production introduces new tax reliefs to attract global investments to Nigeria’s deep offshore projects.
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Ghana

• Ghana inflation rises in September as food prices surge

Ghana’s consumer inflation, opens new tab rose in September after slowing for five consecutive months, driven by an increase in food prices, the statistics service said on Wednesday. Inflation quickened to 21.5% year-on-year in September from 20.4% in August, the statistics service said. Ghana’s government statistician Samuel Kobina Annim told a news conference that the increase was due to a 3 percentage points jump in food inflation.
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• Liquidity crunch in money market as govt misses T-bill target by GHC2.6bn

Liquidity in Ghana’s money market remains constrained as the government fell short of its treasury bill target by GH2.6 billion in the latest auction. According to auction results from the Bank of Ghana, the government managed to raise GH4.7 billion through short-term instruments, against a target of GH7.4 billion, marking an undersubscription of approximately 35.9%. The 91-day treasury bill garnered the highest level of interest, with all GH2.59 billion tendered being accepted. The 182-day bill attracted about GH?830 million in bids, while the 364-day bill accounted for GH1.3 billion of the totals.
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• PURC announces 3.02 per cent hike in electricity tariffs, 1.86% in water tariffs effective October 1

The Public Utilities Regulatory Commission (PURC) has announced an increase in electricity and water tariffs for the third quarter of 2024, with a 3.02% hike in electricity and a 1.86% rise in water, effective October 1. In a statement released on Saturday, September 28, the PURC highlighted that this adjustment was influenced by factors such as inflation, exchange rate fluctuations, and changes in gas prices.
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Francophone West Africa
Senegal

• Audit reveals Senegal’s debt and deficit higher than reported

Senegal is in discussion with the International Monetary Fund (IMF) to take corrective measures after an audit revealed that its debt and budget deficit were much wider than the previous administration had reported, the country’s economy minister said. Abdourahmane Sarr said that an audit of Senegal’s finances ordered by newly elected president Bassirou Diomaye Faye, showed the deficit at the end of 2023 stood at over 10% compared with around 5% the previous government had reported.
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Ivory Coast

• Ivory Coast Sets Cocoa Price For Next Harvest Above Ghana

Ivory Coast has raised the price it pays farmers for their cocoa above Ghana, even as growers in both countries will continue to receive far less than the global market. The world’s top producer of the chocolate-making ingredient increased the farmgate price by 20% to 1,800 CFA francs ($3.06) per kilogram for the harvest that starts on Oct. 1, Minister of Agriculture Kobenan Kouassi Adjoumani said in the capital, Abidjan. The rate, which translates to $3,060 per ton is a notch higher than what Ghana started paying farmers at the beginning of its season this month at $3,039 per ton. This may help to discourage smuggling of Ivorian beans to the world’s second-biggest producer, even though the risk of the illegal exports to other Ivory Coast neighbors, including Liberia and Guinea won’t be fully addressed because of buyers there who pay rates closer to the world market price.
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East Africa
Kenya

• Kenya’s economic growth slows in the second quarter of 2024

Kenya’s economy expanded by 4.6% year-on-year in the second quarter of 2024, down from 5.6% in the corresponding quarter of the previous year, the national statistics reported.
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• Kenyan private sector conditions weaken in September, PMI shows

Kenya’s private sector saw a slight deterioration in business conditions in September as output and new orders contracted again, reversing the brief recovery seen in August, Stanbic Bank reported.
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• Kenya’s inflation eases in Sept amid high food commodity prices

Kenya’s monthly inflation rate eased to 3.6 percent in September 2024 amid an increase in food and non-food commodity prices, data from the Kenya National Bureau of Statistics (KNBS) shows that the country’s inflation dropped from 4.4 percent in August to 3.6 percent last month.
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• Markets Expect CBK to Cut Interest Rates Again

It is expected that a 0.5% or more cut in the benchmark lending rate from the Monetary Policy Committee (MPC) meeting next week following recent economic data according to market analysts.
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Uganda

• Uganda’s foreign reserves decline 4.3% in three months to End-July

Uganda’s foreign exchange reserves shrank 4.3% in the three months to the end of July from the previous three months, extending a recent downward trend, the central bank said in a report published on Wednesday.
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• Government Cuts 2025/2026 budget, Eyes Higher Revenue Collection

The Uganda Revenue Authority (URA) is expected to collect UGX33.182 trillion, an increase from the UGX31.982 trillion target for 2024/25. However, the total budget has been scaled down to UGX57.441 trillion, a notable reduction from the ambitious UGX72.136 trillion budget for the current fiscal year.
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• Uganda seeks funds to add 1,600 MW of hydro capacity

The East African country is seeking funds to build three hydropower plants that would add over 1,600 megawatts (MW) of capacity to help meet rising power demand.
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South Africa
South Africa

• South Africa’s Reforms in Spotlight as Nation Woos Investors

South Africa will need to expedite reforms that can boost economic growth to sustain investor inflows that have flooded in since the formation of a coalition government, according to the world’s largest investment banks. Since the African National Congress aligned with business-friendly parties after losing its outright majority in May 29 elections, South African markets have been on a tear. The rand has gained 5% to the dollar, local-currency bonds have outpaced all peers in an emerging-market index with returns of 24% in greenback terms, and the Johannesburg Stock Exchange has hit successive record highs, delivering a 15.7% return in dollar terms.
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• How asset-based finance fuels growth in South Africa’s key industries

Asset-based finance has emerged as one of the fastest-growing financial products in South Africa, reflecting a shift in how businesses and financial institutions are navigating the complexities of today’s economy. WesBank’s asset-based finance division secured R22 billion in new business, with a total portfolio valued at R39 billion by June 2024.
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• Next Phase of South Africa’s Business-Government Pact Eyes 3% Growth

The next chapter of a partnership between the South African government and business will focus on reviving an economy that’s barely expanded 1% a year over the past decade, the president said. “We have a unique opportunity to work together through this partnership to place our country on a new trajectory,” Cyril Ramaphosa said at an event to launch phase 2 of the compact that started between business and government a year ago. “We have much work ahead of us” including fixing the nation’s freight logistics system, improving grid capacity, reducing crime and boosting jobs, he said.
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• South Africa business activity accelerates in Sept as inflation eases, S&P PMI shows

South Africa’s private sector saw an uptick in growth in September, driven by a rise in business activity and a significant cooling of inflationary pressures, a survey by S&P Global showed on Thursday. The S&P Global South Africa Purchasing Managers’ Index (PMI) climbed to 51.0 in September from 50.5 in August, marking the second consecutive month above the 50.0 threshold that separates growth from contraction. This reading is the joint-highest in over two years, matching that of August 2023.
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• South African Fuel-Price Drop to 2022 Low to Ease CPI Outlook

South African fuel prices will drop to the lowest level more than 2 1/2 years on Oct. 2, boding well for the country’s inflation outlook. The retail price of 95-octane gasoline in Gauteng, the country’s economic hub, will decline to 21.05 rand ($1.23) per liter from Oct. 2, the Department of Mineral Resources and Energy said in a statement on Monday. That’s 18% less than October last year and the lowest since February 2022. The wholesale price of diesel will be 26% lower.
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Mozambique

• Mozambique Rovuma Venture lets modular LNG design contract

ExxonMobil Corp., as leader of the Mozambique Rovuma Venture (MRV), has let a contract to McDermott, through consortium with Saipem and China Petroleum Engineering and Construction Corp., for front-end engineering design (FEED) of the Rovuma LNG Phase 1 project in Mozambique.
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Zambia

• European Union Resumes Budget Support to Zambia

The European Union (EU) resumes its Budget Support Programme for Zambia with the first payment of EUR 20 million out of a EUR 60 million (ZMW 1.8 billion) package that will be transferred to the National Treasury between 2024 and 2026. This marks an important milestone in our partnership that reflects the EU’s recognition of the structural reforms in public finance management conducted by the government of Zambia in 2021, which has been aimed at strengthening economic governance, transparency, and accountability. Despite considerable challenges, including a global health emergency and the ongoing severe drought, the Government has remained steadfast in restoring macroeconomic stability and promoting more resilient and inclusive growth.
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• ERB Reduces Fuel Prices for October 2024

The Energy Regulation Board (ERB) has announced a reduction in fuel prices for October 2024, bringing relief to consumers. The new prices, effective immediately, are as follows: petrol will now sell at K32.70 per litre, down from K33.47, diesel at K28.90 from K30.05, kerosene at K26.95 from K27.52, and Jet A-1 at K29.57 from K30.53.
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• Zambia’s Economy Set to Grow at Fastest Pace in 13 Years Amid Recovery from Historic Drought

Zambia’s economy is poised for its strongest growth in over a decade, with projections showing a 6.6% expansion in 2025, marking the fastest pace since 2012. The recovery follows a difficult period marked by the country’s worst drought in over a century, which severely affected agriculture and energy production. Finance Minister Situmbeko Musokotwane outlined these forecasts in his budget presentation on Friday, echoing estimates made by the International Monetary Fund (IMF).
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Zimbabwe

• Zimbabwe govt working on currency stability

In a comprehensive State of the Nation Address delivered yesterday at the new Parliament Building in Mt Hampden, President Emmerson Mnangagwa highlighted the government’s ongoing efforts to stabilize the local currency, the Zimbabwe Gold, amidst a resurgence of parallel market activities driven by speculative behaviors. The President emphasized the importance of macro-economic stability and announced measures aimed at curbing these disruptive practices.
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• Zimbabwe’s month-on-month inflation surges to 5.8% in September

Zimbabwe’s month-on-month inflation rate accelerated to 5.8% in September, a sharp rise from 1.4% in August, according to the latest data from the Zimbabwe National Statistics Agency (ZimStat). The increase is largely attributed to the rapid depreciation of the Zimbabwe Gold (ZiG) currency, which has been weakening in recent weeks amid a shortage of US dollars in the market.
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Central Africa
Cameroon

• Cameroon Sees 1.8% Drop in Exports in Q1 2024 Despite Strong Extractive Sector

Cameroon’s exports fell by nearly 2% in the first quarter of 2024, according to a report by the National Institute of Statistics (INS). The INS noted that this decline mainly stems from a 3.7% drop in the export of goods, overshadowing a 3% increase in service exports. The drop in goods exports is attributed to poor performance in several sub-sectors, including logs, sawn timber, and various manufactured goods, as well as processed agricultural products. However, exports of crude oil and products from industrial agriculture showed strength.
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• Cameroon’s Cocoa Production Expected to Rise by Over 10,000 Tons in 2024

Cameroon’s cocoa production for the 2024-2025 season is projected to reach 276,900 tons, according to forecasts by the Bank of Central African States (BEAC). This represents an increase of 8,000 to just over 10,000 tons compared to the previous season. The BEAC bases its estimates on a production figure of 268,800 tons, while Cameroon’s National Cocoa and Coffee Board (ONCC) reported a slightly lower figure of 266,725 tons. Despite this small increase, Cameroon remains far from the 600,000-ton target set for 2020 as part of the cocoa-coffee sector recovery plan. This plan, adopted in 2014 by the government and industry stakeholders, also aimed to process 50% of the cocoa beans locally, around 300,000 tons. However, this goal is still out of reach.
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• Cameroon Seeks CFA358bn AfDB Loan to Pave Ngoura-Yokadouma-Moloundou-Kika Road

In a letter dated September 16, Emmanuel Nganou Djoumessi, Cameroon’s Minister of Public Works, requested the support of the Minister of Economy to secure funding from the African Development Bank (AfDB) for the road construction project in the East region. The project aims to pave the Batouri-Kika road, with CFA158.8 billion earmarked for the Ngoura II-Yokadouma section and CFA200 billion for the Yokadouma-Moloundou stretch, extending to Kika at the Congo-Brazzaville border. The total amount sought is CFA358 billion. The 156-kilometer Ngoura II-Yokadouma segment is vital for improving access to agricultural production areas and boosting the economy of the East region. It will also ease the transportation of mining and forestry products from surrounding areas and neighboring countries, including the Central African Republic, Congo, and Chad.
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Democratic Republic of Congo

• UN says Congo rebels generating $300,000 monthly in seized mining area

Rebels in eastern Democratic Republic of Congo have consolidated control over the Rubaya coltan-mining region, imposing a production tax estimated to generate around $300,000 in monthly revenue, the United Nations security council heard. The M23 movement, a Tutsi-led organization purportedly backed by Rwanda, seized the area, which produces minerals used in smartphones and computers, following intense fighting in April. Bintou Keita, head of the U.N. mission in Congo, told the Security Council that trade from minerals in the Rubaya area accounts for over 15% of global tantalum supply.
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