Friday May 13th, 2022 / 9:32 AM / By United Capital Research / Header Image Credit: United Capital Research 

Anglophone West Africa

Nigeria

Last week, JP Morgan announced it has removed Nigeria from its list of emerging market sovereign Eurobond recommendations due to the country’s failure to take advantage of high oil prices. In addition, it stated that the performance of Nigerian Eurobonds is at the mercy of the US Fed’s interest rate.

The total net credit by the Nigerian banking sector to the government rose by N2.2tn in Q1-2022 to N16.3tn. Figures obtained from the Central Bank of Nigeria’s data on Money and credit statistics revealed this.

According to a statement by the SEC in its guideline on Minimum Operating Standards for Information Technology for capital markets operators, the SEC proposed some guidelines that will enable investors in the capital markets to do virtually everything they need to do on their internet-enabled appliances and at their convenience.

Under the aegis of the Association of Licensed Telecoms Operators of Nigeria, Telecommunication companies have said the removal of multiple taxes in the telecoms industry will reduce part of the operational pressure on telcos. According to ALTON, this and regulatory intervention may ensure that the current pricing regime of calls, SMS, and data is sustained.

According to the data released by the National Bureau of Statistics, imports of paper and its allied products were worth N296.7bn between July and December 2021 following the Nigerian paper mills' collapse, which has resulted in heavy import dependency for paper and its allied products.

Ghana

Last week, Ghana’s consumer price inflation was reported to have accelerated to 23.6% year-on-year in April from 19.4% in March. This marks a record high in the last 18 years while doubling the government’s targeted inflation band of 6% to 10%.
 
Francophone West Africa
 

Ivory Coast

Ivory Coast plans to bring back forests and increase food production by raising $1.5bn to restore forests and land over five years under the Abidjan Legacy Programme to address food insecurity.

According to data from the exporters' association GEPEX, Ivory Coast's cocoa grind rose around 16.7% year-on-year in April to 49,000 tonnes.

East Africa
 

Kenya

According to the Central Bank of Kenya, Kenya’s recently auctioned KSh60bn series bond was met with 30.0% under subscription, as the total subscription amounted to KSh43.1bn, 70.0% of the total bond offer. However, the bank accepted only bids amounting to KSh31.7bn.

To curb rising petrol prices, the Government of Kenya disclosed plans to leverage half of the proceeds from the country's total tax revenue on fuel imports to float bonds for the maintenance, development, and rehabilitation of roads.

Interestingly, the proposal to tap the road maintenance levy fund should unlock the issuance of road bonds, according to the chairman of the National Assembly’s transport committee.

The Government of Kenya expressed doggedness as its presses onward with plans to issue another $1m Eurobond debt amid existing securities that are the continent’s worst performers.

The perceived implications for the country approaching an election and whose debt is already at high risk of distress would be pretty significant, as yields on benchmark 10-year notes have almost doubled since Jan-22 to 11.2%.

According to the African Airlines Association Secretary-General, a committee has been formed, including major carriers such as South African and Kenyan Airways, to secure deliveries for 12 months, starting from July.

Extracts from the recently released Kenyan M3 Money Supply report by the Central Bank of Kenya disclosed a 4.4% y/y climb in the nation's M3 money supply in Feb-22.

Also, Stanbic Bank and S&P Global released purchasing managers’ indexes for the entire economy of Kenya. In March, the report disclosed a 2.0% decline in the country’s PMI from 50.5pts to 49.5pts.

Tanzania

The International Monetary Fund (IMF) sent delegates for talks with the Government of Tanzania on the $1.1bn funding request of the country's President, intended to support the nation’s recovery from the coronavirus pandemic.

According to the Ministry of Transports of Tanzania, the country sets out to slash transit costs for Uganda trucks, to $10 per 100km, from $500 for trucks driving the 1,485km stretch between the Tanzanian border and Dar es Saleem of Uganda, effective from July 1.

Rwanda

In its last meeting, the Rwandan monetary policy committee voted unanimously to maintain its benchmark interest rate at 5.0%, highlighting accelerating inflation and risks to economic growth as key factors of HOLD consideration.

Also, the country’s Institute of Statistics released data on the country’s recent Inflation trajectory. Data extracted showed a 9.9% y/y climb in Kenya’s CPI Inflation rate in April vs +7.5% y/y recorded in March.

Fitch affirmed Rwanda’s long-term foreign currency debt rating at B+.

Uganda

Rwanda's Minister of State for Energy disclosed that the country had acquired land to construct East Africa’s first nuclear power plant. The continent’s top exporter of coffee beans attempts to expand its electricity generation capacity a multi-fold.

According to the Bank of Uganda, the country’s M3 money supply climbed 5.2% y/y in March vs +5.3% in February, down by 10bps.

The Government of Uganda has decided to shun the introduction of petrol subsidy, even after the spike in the pump prices of PMS and related crude products, on the back of supply disruptions partly caused by Russia’s invasion of Ukraine.

Mozambique

According to the National Institute of Statistics of Mozambique, the country’s inflation rate increased to 7.9% y/y in April, the highest since Oct-17. For context, rising food prices and non-alcoholic beverage and transport costs emerged as the primary drivers of the increase.

The IMF approved a fresh economic program for Mozambique that includes a $456.0mn loan, nearly six (6) years after it froze a previous arrangement because the government concealed more than $1.0bn of hidden debt.

In addition, this new loan is part of a three-year arrangement and is about 150.0% of the natural gas-rich nation’s quota with the fund and will likely catalyse additional financing by development
 partners.

Also, according to the country’s Ministry of Economy and Finance, the World Bank is set to finalise the $300.0m of budget support for Mozambique, latest, by June 30.

Southern Africa
 

South Africa

According to Bloomberg, South Africa’s breakeven inflation rate for the 10-year CPI linked bonds climbed 3bps to 6.79%. For further context, the country’s March CPI Inflation rate stood at 5.9% y/y.

Also, the country was met with a 9.3% y/y decline in its mining production in March vs the 5.8% decline in February, with seasonally adjusted production climbing 1.7% m/m vs -6.0% m/m recorded in the previous month.

South Africa signed a grant agreement with Global Fund on Thursday, worth $547.0m, to support tackling AIDS, Tuberculosis, and malaria.

South Africa is headed for a record year of power cuts if station breakdowns fail to improve, particularly at coal-fueled plants, as the state-owned Eskom Holdings, SOC Ltd. Iterated commitment to the resumption of electricity rationing after various generation units in the country were shut for repairs.

According to the country's Institute for Communicable Diseases reports on covid related news, South Africa has identified 10,017 new Covid-19 cases on Wednesday, the highest daily count of new cases since January.

Zambia

First Quantum Minerals Ltd. Approved a $1.25bn project to expand its Kansanshi copper mine in Zambia after the new government committed to a more predictable investment climate. In addition, the investment is set to extend the life of one of Africa’s biggest copper mines until the 3040s and increase copper and gold production by about 25.0%.

 
Zimbabwe

According to Bloomberg, Zimbabwe’s cost of gasoline has increased by 7.7%, from Z$252.40 to Z$271.85 per litre. Similarly, Diesel will now cost Z$283.87 per litre from Z$264.77 previously, resulting in a 7.2% increase.

According to Bloomberg, Zimbabwe’s April gold production has 79% y/y to 2,481.4kg against 1,384.5kg earlier recorded, with small scale miners accounting for 65.4% of the total output recorded in April.

Air Zimbabwe has warned of flight disruptions due to scarce jet fuel caused by supply chain constraints.

Following the depreciation of the Zimbabwean dollar, controls to stop third party country foreign payments have been placed. With these controls, the President, Emmerson Mnangagwa, aims to "minimise the creation of broad money that is prone to abuse to manipulate the exchange rate" with this control.

Central Africa
 

Cameroon

According to the country’s Finance Ministry, Cameroon’s external debt servicing in the last three months through March jumped 93.0% to 191.3 billion CFA francs.

According to loading schedules seen by Bloomberg, Cameroon plans to cut exports of its kole crude to 32kb/d in June from 61kb/d in May.

Democratic Republic of Congo (DRC)

The IMF forecasts that the Democratic Republic of Congo’s economy will expand by over 6% for a second consecutive year despite the impact of the Russia-Ukraine war as revenues from a booming mining industry are expected to shield the blow.