November 8, 2024/United Capital Research
Anglophone West Africa (WAEMU)
Nigeria
Nigeria, Morocco, ECOWAS advance talks on $26.00bn African Gas Pipeline Project
The federal government, alongside the Economic Community of West African States (ECOWAS), Morocco, and Mauritania, have reaffirmed their commitment to advancing the $26.00bn African Atlantic Gas Pipeline project, which combines two major projects: the $975.00mn West African Gas Pipeline Extension Project, which spans 678 km, and the 5,669 km Nigeria-Morocco Gas Pipeline, anticipated to cost around $25.00bn.
Nigeria’s forex market still unstable, says Fitch
Fitch has projected that non-performing loans of Nigerian banks will increase in 2024 on the back of high interest rates and inflation in the country. This was stated in its latest credit ratings report on Nigeria where it affirmed the country’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘B-‘with a Positive Outlook.
Nigeria posts $5.14bn in Current Account Surplus, bolstering forex stability
Nigeria recorded a current account surplus of $5.14bn, or 11.46% of GDP, in Q2-2024, representing a significant improvement from the $3.38bn (7.35% of GDP) surplus reported in the previous quarter. This boost in the nation’s external balance reflects a reduction in import bills and steady remittance inflows, which have helped stabilize the naira against the dollar.
Net forex inflow into Nigeria increases by $17.00bn in Q2 2024
Nigeria recorded a significant increase in its net foreign exchange (forex) inflows in Q2-2024 as the net forex inflow surged by 49.39% to $17.18bn in Q2-2024, compared to $11.50bn in the preceding quarter. This $17.00bn rise is due to the impact of increased inflows and reduced outflows across autonomous sources and official channels.
FG’s budget deficit jumps to N4.53tn in three months amid low revenue collection
The federal government of Nigeria’s fiscal deficit surged to N4.53tn in Q2-2024, up from N3.88tn in the previous quarter. While the deficit saw a notable rise, the federal government’s revenue remittance increased only marginally to N2.30tn. This figure represents a 57.66% increase from the first quarter but still falls 52.49% short of the target for the period, prompting a heavy reliance on deficit financing.
Ghana
Ghana expects 2024/25 cocoa production resurgence
Ghana’s cocoa production is expected to rebound in the 2024/25 crop season, buoyed by favourable weather conditions, according to local farmers, officials from regulatory body Cocobod, and buyers. However, challenges such as illegal gold mining, smuggling, and disease continue to pose risks. In June, the world’s second-largest cocoa producer saw its output fall below 55.00% of its average seasonal output, marking a more than two-decade low.
Government takes steps to reduce financing energy sector shortfalls
Ghana’s consumer inflation opens new tab rose for the second month in a row in October, to 22.10% y/y from 21.50% in September, the statistics service said on Wednesday. Government statistician Samuel Kobina Annim told a news conference that both food and non-food inflation had quickened last month.
Value of trading activity dropped by 45.00% in 2023
The Ghana Commodity Exchange (GCX) has reported a substantial decline in trading activity for 2023, with total trade value falling to GH?11.30mn — a 45.00% decrease from GH?20.7 million in 2022. This downturn, detailed in the 2023 Financial Stability Review, underscores the economic and environmental challenges facing Ghana’s agricultural market. GCX’s traded commodities include maize, soybeans, sorghum, sesame, rice, and cashews. The overall decline reflects the impacts of macroeconomic instability and adverse climate conditions, both of which have influenced price dynamics and market performance.
East Africa
Kenya
Treasury plans for salary tax cuts over Shif, housing levy
The Treasury is proposing further payslip reliefs from housing levy and Social Health Insurance Fund (SHIF) deductions, which have seen thousands of workers breach the employment law demands they take home at least a third of their salaries.
World Bank Warns Ruto’s Govt of High Electricity Prices if It Ends Kenya Power’s
The government sought to end the Kenya Power and Lighting Company’s (KPLC) electricity distribution market monopoly World Bank issued recommendations against the move by President William Ruto’s administration, saying it would lead to a surge in electricity prices The Bretton Woods institution said subjecting KPLC to the competition will cripple the Nairobi Securities Exchange (NSE)-listed firm, which has long-term power purchase agreements with power producers (PPs).
IMF Advises William Ruto’s Gov’t to Introduce New Taxes After Approving KSh 78b Loan
The IMF revealed that it was engaging with government officials on new tax reforms that would be ‘acceptable’ to taxpayers and stakeholders This follows the conclusion of the seventh and eighth reviews under the Extended Fund Facility and Extended Credit Facility President William Ruto’s government will reinstate some of the tax provisions it removed from the contentious Finance Bill 2024, which was repealed.
Uganda
Uganda Looks to Bolstering Ties With Canada
For the first time, Uganda’s High Commission in Ottawa has joined Canada’s national economic tour, spotlighting the East African country’s commitment to cross-continental collaboration. Uganda’s deputy head of mission in Ottawa, Amb.Allan Kajik said by engaging with government officials and Canadian entrepreneurs, Uganda has positioned itself as a proactive partner in economic development.
Uganda Calls On Global Miners to Invest in Critical Minerals
Uganda is calling on international mining giants to invest in the country’s rich deposits of critical minerals to drive its clean energy ambitions and economic growth. Dr. Luisa Moreno, Advisor on Minerals to President Yoweri Museveni, said there’s need for Uganda to become a significant player in the global supply of essential minerals like lithium, cobalt, and rare earth elements, all pivotal for renewable energy technologies.
Rwanda
Nigeria, Rwanda Sign MOU to Strengthen Economic Partnership
Rwanda and Nigeria have strengthened their economic partnership withthe signing of a Memorandum of Understanding (MoU) at the Lagos International Trade Fair between the Lagos Chamber of Commerce and Industry (LCCI) and the Private Sector Federation (PSF), Rwanda.
The signing ceremony took place on the sidelines of the 2024 Lagos International Trade Fair, further underscoring the commitment to enhancing trade and investment ties between the two nations.
Tanzania
Tanzania targets $1.5 billion in diaspora remittances by 2028.
The government is stepping up efforts to engage one million diaspora workers by 2028 with the goal of doubling the annual contributions of Tanzanians abroad to $1.5 billion (Sh3.75 trillion).
Tanzania poised to capitalise on global battery supply chain, says new report.
Tanzania is emerging as a key player in the global supply chain, with growing opportunities to refine critical minerals and manufacture batteries competitively.
Gazprom initiates pilot project to supply CNG fueling trucks to Tanzania.
Gazprom presented a pilot project to supply two compressed natural gas fueling trucks to Tanzania at African Energy Week 2024 in Cape Town, the Russian gas giant said. The trucks, which are intended to fuel various vehicles with CNG and transport it, will make it possible to increase the number of daily fuelings on Tanzania’s natural gas vehicle (NGV) market, the company said, adding that the number of local automobile owners choosing natural gas is rapidly growing.
South Africa
Angola
Angola’s draft budget forecasts 2025 deficit of 1.65% of GDP
Angola’s government anticipates a budget deficit of 1.65% of gross domestic product in 2025, slightly higher than this year’s projected 1.46% deficit, draft budget documents showed. The draft 2025 budget of Africa’s second-largest crude oil exporter is based on a $70 a barrel oil price, according to the documents posted on the finance ministry’s website. Brent crude futures were trading around $74 a barrel.
South Africa
South Africa’s private sector growth sustained in October as costs fall, PMI shows
South Africa’s private sector maintained its growth trajectory in October, bolstered by a decline in business costs and selling prices, a Purchasing Managers’ Index (PMI) survey showed. The S&P Global South Africa PMI recorded a reading of 50.6, slightly down from September’s 51.0, but still above the 50.0 mark that indicates growth. The PMI has now signalled expansion for three consecutive months.
South African factory sector expands for second month, Absa PMI shows
South African manufacturing activity grew in October for the second month in a row, a local purchasing managers’ index (PMI) survey showed, the first time since early 2023 that the highly volatile sector has recorded two consecutive months of growth. The seasonally-adjusted PMI sponsored by South African bank Absa fell to 52.6 points in October from a revised 53.3 in September, staying above the 50-point mark that separates expansion from contraction.
South Africa and Britain to strengthen trade and defence ties
South Africa and Britain have agreed to boost trade and defence cooperation, the two countries’ foreign ministers said after meeting on Tuesday. South Africa is already Britain’s biggest trading partner on the African continent and Britain is among the top five destinations for South African exports, which include precious metals, cars and agricultural products. Bilateral trade between the two countries totalled about 133 billion rand ($7.62 billion) last year, according to South African Revenue Service data.
S.Africa’s Redefine reports 2.90% fall in annual income, outlook improves
South African commercial property group Redefine, reported that its full-year distributable income fell 2.90%, at the centre of its forecast range and still affected by a prolonged period of high interest rates. The group said its distributable income per share – which is equivalent to net profit and one of the primary measures of underlying financial performance in the listed property sector – declined to 50.02 cents in the year ended Aug. 31, from 51.53 cents a year earlier.
October sees highest passenger car growth in 5 years in South Africa’s auto industry
Naamsa new vehicle statistics for October 2024 show that aggregate domestic new vehicle sales in October 2024, at 47,942 units, reflected an increase of 2,506 units, or a gain of 5.5%, from the 45,418 vehicles sold in October 2023. Export sales decreased by 17,324 units, or 42.6%, to 23,342 units in October 2024 compared to the 40,666 vehicles exported in October 2023. Overall, out of the total reported industry sales of 47,924 vehicles, an estimated 38,520 units, or 80.4%, represented dealer sales, an estimated 14.8% represented sales to the vehicle rental industry, 2.6% to industry corporate fleets, and 2.2% to government.
Zambia
Zambian private sector decline eases, but load shedding continues to hamper output
October PMI data indicated a further decline in the health of the Zambian private sector, as the impact of load shedding continued to hamper output and push costs up. That said, the extent of the deterioration in business conditions moderated amid softer contractions in output, new orders and employment.
Although firms remained in retrenchment mode, with input buying and stocks also falling, rates of decline slowed on the month. Meanwhile, business confidence improved despite being historically subdued.
Govt urges investors at IMF/World Bank meetings to invest in Zambia’s renewable energy
The government has urged investors to help the country effectively respond to the power supply emergency and ensure that long-term power sustainability strategies are implemented through public-private partnerships. Further, the government has disclosed that it released K16.9 billion last month to finance developmental programmes and general public service delivery.
Zesco increases daily power supply to 5 hours
ZESCO has announced an increase in daily electricity supply from three to five hours in view of the emergency tariff adjustment that has now taken effect. In a statement, the corporation stated that while it aims to provide a consistent five-hour supply, the availability of power imports and other unforeseen factors may occasionally affect this schedule.
Zimbabwe
RBZ holds inflation projections steady, but analysts defy
The Reserve Bank of Zimbabwe (RBZ) has come under scrutiny over its inflation projections, with the apex bank insisting the monthly inflation rate, which soared to 37.2 percent in October from 5.8 percent the previous month, will soon cool down. This comes after the central bank devalued the domestic currency by about 43 percent last month, adding inflationary pressures to prices. But the central bank expects monthly inflation to close the year around its original forecast of 5 percent.
Increased levels of load-shedding likely through November
The Zimbabwe Electricity Supply Authority (ZESA) will likely continue implementing higher levels of load shedding through at least late November as the utility provider grapples with various issues. Zimbabwe resumed higher stages of power cuts in June due to an ongoing drought and low hydropower generation. In late August, a technical problem at the Hwange Thermal Power Station worsened supply shortages, reportedly extending some power cuts to 18 hours daily.
Zim tax dragnet fails to capture informal sector
Zimbabwe’s efforts to harness tax from the informal sector may be encountering significant challenges after the Treasury managed to collect a mere 3 percent of its target during the first eight months of the year, according to Government financials for the month ended August.
