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Snapshot on the African Economy as @ 100622

Jun 10, 2022   •   by   •   Source: United Capital   •   eye-icon 551 views

Anglophone West Africa

Nigeria

  • According to reports, the Federal Government has suspended its $950.0mn Eurobond borrowing due to unfavourable market conditions during the time frame approved for the fundraising and market pricing.
  • According to the Debt Management Office (DMO), Nigeria’s total public debt stock increased by 5.2% q/q to N41.6tn in Q1-2022 from N39.6tn in Q4-2021. According to the DMO, these figures include new domestic borrowing by the FGN to partly finance the deficit in the 2022 Appropriation Act, the $1.3bn Eurobond issued in March 2022 and disbursements by multilateral and bilateral lenders.
  •  The Director-General, Nigerian Geological Survey Agency, Dr Abdulrazaq Garba, has said that the high-grade lithium discovered in Nigeria has attracted foreign interests. He said this while briefing journalists on mineral exploration activities in Abuja. Lithium is a highly reactive metal used to make energy-dense rechargeable batteries for electronics, such as laptops, mobile phones, electric vehicles, and grid storage.
  • According to the National Bureau of Statistics (NBS), Nigeria's crude oil exports increased by 175.1% y/y to hit N5.6tn in Q1-2022, supported by the significant surge in crude oil prices, covering up for declining production levels.
  • While crude oil exports accounted for 79.2% of total exports, non-crude oil export value stood at N1.4tn, representing 20.8% of total exports.
  •  According to Bloomberg sources, Shell Plc will receive two final offers for its onshore oil and gas fields in Nigeria. Both Heirs Oil and Gas Ltd. and ND Western Ltd. are competing to buy Shell’s 30% interest in the joint venture. Bids are due June 10.
  •  According to Bloomberg, Nigeria’s Egina crude for July loading is being offered at $13/bbl. More than Dated Brent as competition intensifies for the diesel-rich grade.


 Ghana

  • Last week, S&P Global released the purchasing managers’ index for Ghana’s private sector in May. The Index fell 90bps m/m to 47.4 from 48.3 in April and 4.1% y/y from 51.5 recorded in May 2021. This represents the fifth consecutive month of contraction.
  • Similarly, output fell 3.5% to 42.7 from 46.2 recorded in April.
  • Last week, Ghana sold 70mn cedis ($8.9 mn) of bills due June 22. The bills were sold at
     Of 99.3 cedis, with a 19% yield and settlement on June 8.
  • Ghana’s inflation rate reached an 18-year high at 27.6% in May from 23.6% in April. This is due to the surge in food and transport costs triggered by the Russia-Ukraine war.
  • The headline inflation rate continues to surge above the central bank’s upper ceiling of the central bank’s target band of 6% to 10% despite the 200bps interest rate hike to 19% in May.
  • According to Bloomberg, Ghana’s debt-service expense is estimated as 47% of government revenue. The S&P Global Ratings has noted that Ghana may need a decade of fiscal tightening amongst other reforms to boost domestic savings and attract more non-debt external financing sources.


Francophone West Africa

Ivory Coast

  • According to Bloomberg, the Ivory Coast government plans to raise 9.3trn CFA debt from international funders such as the World Bank, the European Union, and the Islamic Development Bank.
  • The Government plans to use debt to accelerate the economy's structural transformation by investing in infrastructure and health services.
  • According to Bloomberg, Ivory Coast Cocoa arrivals were 28,023 Tons for May 30-June 5. This shows a 12.7% decline in last year's estimated 32,082 tons of arrivals.
  • Last week, Jean-Claude Kassi Brou, the president of the commission of the Economic Community of West African States, was named governor of the Central Bank of West African States (BCEAO).


Senegal

  • According to the Banque Islamique du Senegal, the nation has returned to the regional market with a record Sukuk offering. A total of 330bn CFA francs ($525.4mn) of Sukuk bonds with seven, ten and 15-year maturities were sold on the regional Islamic bond market.
  • Last week, Senegal raised the price of super unleaded fuel to 890 CFA francs from 775 CFA francs due to a global increase in oil and gas prices. However, the cost of ordinary fuel, diesel and gas used for cooking remained unchanged.


East Africa

Kenya

  • The World Bank released its Kenyan economic growth forecast for the year. A 5.5% expansion is estimated—a 60bps upgrade from its previous forecast.
  • In its second supplementary budget for the current fiscal year, the Nations National Assembly approved an additional Shs70.9bn for spending on Fuel subsidies and drought-related expenses.
  •  The fiscal deficit grew by Shs94.7bn for the 2021-2022 fiscal year ending this month, printing at Shs1.0trn. The FG plans on financing the debt with additional external borrowing.
  • The Kenyan National Assembly, through its speaker Justin Muturi, divulged the approval of the increase in the borrowing limit to Shs10.0trn from its previous ceiling of Shs9.0trn.
  •  According to the 2021 annual bank supervision report by the Kenyan Central Bank, insured bank deposits increased by 16.5% to Shs819.17bn in 2021. This accounts for 21.2% of total deposits, a 3.9ppt y/y increase.


Rwanda

  • The Local Administrative Entities Development Agency (LODA) has announced plans to write off Rwf4.8 billion loans given to beneficiaries under the Vision 2020 Umurenge Programme (VUP).


Uganda

  • According to a Bloomberg report, the FG is seeking $620mn to continue the stalled 300,000 tons-per-year phosphate fertiliser project.
  • The recently published Stanbic and S&P Global purchasing managers index (PMI) for the nation's economy revealed a decline from 53.9 in April 2022 to 51.5 in May 2022.
  • According to reports from the Uganda National Meteorological Authority, the country would experience normal rain levels, further abating the drought in the region and boosting bean size and volume in the October harvest.
  • The Bank of Uganda released its Annual Supervision Report for 2021, which revealed a 26.9% y/y increase in commercial banks' profitability to Shs 1.1trn.


Tanzania

  • According to the National Bureau of Statistics, consumer prices rose 4.0% y/y in May versus 3.8% in April.
  • The Apex bank reiterated the need for continued economic recovery and would maintain its accommodative stance in June.
  • Bloomberg reports reveal the Tanzania Coffee board offered 6.87 metric tons of coffee beans at the Kagera Dry Cherry online coffee exchange.
  • According to recent reports from the U.S Department of Agriculture, Tanzania’s coffee production is set to increase by 3.7% to 1.4 million 60kg bags in the next 12 months.


Mozambique

  • The recently published Stanbic and S&P Global purchasing managers index (PMI) for the nation's economy revealed a decline from 52.9 in April 2022 to 52.4 in May 2022. New orders rose to 55.1 from 54.7 in April.
  • The Ministry of Agriculture and Rural Development banned the importation of animals, animal products and by-products from Zimbabwe to curtail the disease outbreak in the sector.


Southern Africa

South Africa

  •  According to the South African Reserve Bank report, the Q1 current account surplus printed at 143 billion Rand, 2.2% of the nation’s GDP, versus last quarter's surplus, which was 2.1% of the GDP
  • The nation's GDP rose 3.0% y/y, and 1.9% q/q in Q1- 2022, via Bloomberg, reports.


Angola

  • The Angolan apex bank’s governor reiterated that the Central Bank will persist with a tight monetary policy to bring inflation below 10% by 2024.
  • The nation experienced its initial public offering as Banco BAI $94mn from selling 10% of its shares.


Zambia

  • The recently published Stanbic and S&P Global purchasing managers index (PMI) for the nation’s economy revealed a decline from 50.5 in April 2022 to 49.8 in May 2022. Output falls to 49.4 vs 50.3 in April.
  • In its most recent primary market auction, 1.6bn Kwacha worth of T-bills was sold across all tenors.


Zimbabwe

  • According to Bloomberg reports, the Reserve Bank processed $2.4bn of foreign payments in Q1-2022.
  • The Central Bank’s auction system received $528.1mn in Q1-2022, while the interbank market contributed $58.4mn.
  • According to Bloomberg reports, Zimbabwe regulators raise gasoline prices to Z$539.56 per litre and Diesel to Z$481.02 per litre, a 12% and 10% increase, respectively.


Central Africa

Cameroon

  • According to Bloomberg, Cameroon plans to increase coal exports by shipping 61kbd of Kole crude in July, up from 32k b/d in June, according to loading schedules.
  • According to Bloomberg, Spain imported 228k tons of crude from Cameroon in April, which is the highest monthly since March 2016.


Democratic Republic of Congo (DRC)

  • According to Bloomberg, the Democratic Republic of Congo is considering establishing a stabilisation fund to protect its booming mining industry.
  • The Democratic Republic of Congo’s plan to auction oil exploration blocks next month could jeopardise a $500 million forest preservation agreement. It could potentially disrupt some of the world’s most important carbon sinks.
  • Some of the blocks are estimated to contain 16bn barrels of crude reserves and overlap with the biggest tropical peatlands that cover 145,000sq km and store about 30bn tons of carbon. This is equivalent to about 82% of annual global carbon dioxide emissions.


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