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Snapshot on the African Economy as @ 240323

Mar 24, 2023   •   by United Capital Research   •   Source: United Capital   •   eye-icon 291 views

Anglophone West Africa
Nigeria

  • The Monetary Policy Committee (MPC, or the Committee) yesterday, 21-Mar-23, announced the Committee’s decision to raise the Monetary Policy Rate (MPR) by 50bps, bringing it from 17.5% to 18.0%. The Committee also voted to retain the asymmetric corridor at +100/-700 basis point around the MPR and the Cash Reserve Ratio (CRR) at 32.5%, while retaining the liquidity ratio at 30.0%.
  • According to the Nigeria Inter-Bank Settlement System (NIBSS), the value of electronic utility payments fell by 44.9% to N90.9bn in February 2023 from N164.9bn in January 2023 despite the Central Bank of Nigeria’s (CBN) Naira redesign policy aimed at growing cashless transactions.
  • Domestic investors purchased N2.61tn worth of FGN Bonds in Q1-2023 out of which N1.9tn was eventually allotted amid yield on 10-Year Bond falling below the inflation rate of 21.91%. Latest statistics released by the Debt Management Office (DMO) revealed that a total sum of N1.1tn was offered in the period under review as the Federal Government intensified borrowing from local investors to bridge budget deficit.
  • The Minister of Transportation, Mu’azu Sambo, disclosed that The Federal Executive Council, on Wednesday, 22-Mar-23, approved the sum of N453.9bn for the procurement of rolling stock, operation and maintenance equipment for the Kano-Maradi standard gauge rail line currently under construction.
  • The amount also includes N510.9mn for procuring four (4) customised fire service/search and rescue vans in seaports at Port Harcourt, Lagos Port Complex, Tincan Island port and the Marina headquarters of the Nigerian Ports Authority.
  • The Minister of Communications and Digital Economy, Isa Pantami, disclosed that The Federal Government had announced the removal of its proposed 5.0% excise duty on telecommunication services, in line with the recommendations of the Presidential Review Committee on Excise Duty in the Digital Economy Sector.
  • The Minister for Economic and Commercial Affairs, Embassy of the Republic of China in Nigeria, Wang Yingqi, has blamed the Covid-19 pandemic for the drop of Chinese’s trade volume to Nigeria from $ 300.0mn in 2021 to $ 290.0mn in 2022.


Ghana 

  • According to Ghana Statistical Service (GSS), Producer Price Inflation (PPI) slowed to 50.8% y/y in February 2023 compared to the revised 52.6% y/y increase in January 2023. On a monthly basis, producer prices rose significantly by 7.0% m/m in February despite the 1.1% m/m increase in the previous month.
  • Fitch Ratings has upgraded Ghana’s local-currency bonds issued domestically (those that are yet to mature) to CCC from D. In addition, the rating agency affirmed the nation’s long-term foreign currency issuer default rating at "RD". The upgrade follows the completion of the Domestic Debt Exchange Programme (DDEP) by the government.
  • The headline inflation rate for Feb-2023 was reported at 52.8% y/y, marginally lower than the 53.6% y/y growth seen in Jan-2023. The improved print was driven by the first decline in food inflation in thirteen (13) months.
  • Consumer prices increased by 1.9% in the month as compared to the 1.7% growth seen the previous month, which was driven by the increase in utility tariffs. Food inflation was recorded at 59.1% y/y (2.0% m/m growth) while non-food inflation was unchanged at 47.9% y/y (1.7% m/m growth).



Francophone West Africa (WAEMU)
Ivory Coast 

  • Bloomberg reports revealed that Ivory Coast farmers sent 21,467 tons of cocoa to ports between 13-Mar-2022 and 19-Mar-2023. According to government data, Ivory Coast has sent 1.75mn tons of cocoa since the start of the season in October 2022 compared to 1.82mn tons reported same period last year.



East Africa
Kenya 

  • According to Retirement Benefits Authority, Kenya Pension Funds’ assets under management climbed by 1.9% y/y to Ksh1.6tn ($12.1bn) in 2022. The marginal growth of the assets is partly attributed to the slow rebound of the financial market after the adverse effects of the Covid-19 pandemic, and the uncertainties due to Kenya’s presidential elections and the Russia-Ukraine war.
  • The National Treasury paid a nominal price of $1.0 to acquire Helios Investment’s 60.0% stake in the telecommunication company "Telkom Kenya". The Kenyan government also agreed to acquire two loans that Helios Investment advanced to Telkom, totaling $291.1mn.
  • The Central Bank of Kenya (CBK) has announced the issuance of the Kenya Foreign Exchange Code (the FX Code) to commercial banks. The FX Code sets out standards for commercial banks and aims to strengthen and promote the integrity & effective functioning of the wholesale foreign exchange (FX) market in Kenya.
  • The Local Authorities Pension Trust (LAPTRUST) has been listed on the Nairobi bourse to tap into the benefits of real estate investments. LAPTRUST is listed as the first pension-driven Income-Real Estate Investment Trust (I-REIT) at the Nairobi Securities Exchange (NSE). This will provide investors with a unique opportunity to invest in a diversified portfolio of income-generating real estate assets.

 

Rwanda 

  • The government of Rwanda and Uganda held a meeting to discuss areas of cooperation between the two neighbouring countries. According to the Rwandan Ministry of Foreign Affairs, the key focus areas were developing efforts to strengthen partnerships in implementing joint projects and trade opportunities & challenges faced by the cross-border business community in both countries.
  • Brac International signs a Memorandum of Understanding (MoU) with the government of Rwanda to empower people living in extreme poverty and develop sustainable livelihoods that will break the poverty trap in the long term. This is part of the Rwandan government's efforts to eradicate extreme poverty by 2030.


Tanzania 

  • According to the World Health Organisation (WHO), Tanzania has confirmed its first-ever case of Marburg Virus Disease in the Bukoba district in the country’s northwest Kagera region. So far, the virus has killed five (5) people, with three (3) others admitted in the hospital.
  • In response, the Africa Centers for Disease Control and Prevention (Africa CDC) announced that an expert team would be dispatched to Tanzania to help respond to a Marburg Virus Disease (MVD) outbreak.
  • Black Rock Mining has signed a non-binding Memorandum of Understanding (MoU) with the Tanzania-Zambia Railway Authority (TAZARA) to transport graphite by rail from its Tanzanian Mahenge project to the Port of Dar es Salaam. This will give Black Rock a tremendous advantage in running a lower-cost and sustainable operation.


Uganda 

  • Ugandan government plans for its first infrastructure bond issuance in the fiscal year 2024/2025. The fund will be used to finance the development of a viable project. This project includes the development of liquefied petroleum gas and renewable energy production and the building of power transmission lines & roads in areas attractive to tourists, among others. The bond will be issued in the nation’s local currency with a 25-year tenure lifespan.
  • In addition, the Ministry of Finance plans to liaise with other government agencies to provide an outlet for Ugandans living abroad to invest back home.



Southern Africa
Angola
 

  • Bloomberg reports Angola LNG scrapped tenders slated to close this week after a production issue at its facility. Upcoming tenders have been withdrawn while this is being investigated. It is not clear how much total supply will be affected. One of the cargoes cancelled was being offered on a DES basis for April delivery as far east as India.
  • In addition, the nation plans to cut crude exports to 31.3mn bbl, or 1.0mbpd, in May-2023 as against the 1.1mbpd for Apr-2023
  • Angola’s Central Bank Governor Jose de Lima Massano announced that the MPC reduced the benchmark interest rate to 17.0% from 18.0%, citing expectations of slowed inflation in the future.
  • ExxonMobil Corporation has stated that it plans to invest $15.0bn from now to 2030 if it discovers commercial quantity in the Namibe Basin. The Angola National Agency for Petroleum, Gas and Biofuels (ANPG), Exxon and state-owned Sonangol signed an addendum to blocks 30, 44, and 45 in the Namibe Basin to make exploration in the area more competitive.
  • The Chairman of the Board of Directors of the Airports Management Company (SGA), José Tavares Venâncio, revealed that Angola plans to certify the Catumbela International Airport, in centre-west Benguela Province, and the southern Huila Province airport, within the next two years, to boost international traffic and stimulate the country's economy.


South Africa 

  • According to Statistics South Africa Consumer prices rose 7.0% y/y (higher than +6.8% estimates) in Feb-2023 from +6.9% y/y recorded in Jan-2023. Consumer prices rose 0.7% m/m (estimate +0.6%) from the -0.1% m/m print in Jan-2023.
  • South Africa’s government has offered public servants a 7.0% pay increase for the next financial year, more than what was provided for in the annual budget.  The 235,000-member Public Servants Association has already rejected it and wants 8.0%.
  • Data from the First National Bank (FNB) and the Bureau for Economic Research revealed that South Africa's consumer confidence index fell to -23.0 in Q1-2023 from -8.0 in Q4-2024.
  • Data from the South African Reserve Bank indicated that South Africa's Composite leading indicator fell to 120.8 in Jan-2023 from a revised 121 in Dec-2022.


Zambia 

  • Zambia remains at a stalemate in restructuring circa $12.8bn of the country’s external debt. The Zambian government needs bilateral creditors to agree on debt treatment after the Common Framework, and Paris Club organisers in mid-Jan-2023 presented restructuring options.
  • According to the Ministry of Finance, an International Monetary Fund delegation led by Mission Chief for Zambia, Allison Holland, is in Lusaka to commence the first review of the country’s Extended Credit Facility arrangement.
  • Zambia joins the AFR100. The African Forest Landscape Restoration Initiative (AFR100) is a pan-African effort to accelerate the restoration of 100.0mn hectares of land across the continent by 2030. The Minister of Green Economy and Environment, Collins Nzovu, said that as part of efforts toward the continental target, Zambia has committed to restoring two million hectares of forests by 2030.


Zimbabwe 

  • Zimbabwe's 300.0 megawatts coal-fired power plant started production this week. Zimbabwe Power Co. disclosed that the Hwange Power Station Expansion Project was producing 80
     Megawatts when it took off, but the production and feed to the national grid will gradually increase to 300.0MW.
  • The second 300.0MW segment is expected to come online by the end of this month (Mar-2023). The $1.4bn 600.0MW project is 85.0% funded by China, while Zimbabwe’s government contributes the remainder with Sino Hydro as the main contractor.



Central Africa
Democratic Republic of Congo (DRC) 

  • A statement from Democratic Republic of Congo’s Prime Minister Jean-Michel Sama Lukonde, revealed that Fortescue Future Industries plans to rehabilitate a turbine on Congo’s Inga II hydropower dam to provide electricity for the processing of key battery minerals including cobalt and nickel.
  • According to data from Bloomberg, Lukoil plans to invest an additional $1.0b in the Marine XII oil and gas project in the Republic of Congo. Marine XII is based on a production-sharing contract. Eni is the operator with a 65.0% stake, while Lukoil owns 25.0%. State company Societe Nationale des Petroles du Congo holds a 10.0% stake.
  • According to a report from Interfax, Lukoil & partners are mulling a floating LNG facility at the Etinde project offshore Cameroon. After the previous operator New Age sold its 37.5 percent stake to Perenco, Lukoil anticipates that the Cameroonian government will authorize the new operator for the Etinde project in July.


Cameroon 

  • The CEMAC Heads of State resolved on a progressive reform of the framework for monetary cooperation with France during their most recent meeting on Friday, March 17, 2023, in Yaoundé. They agreed to hasten negotiations at the ministerial level.
  • The reforms to be implemented include changing the currency denomination, closing the operating account in the books of the Bank of France to allow CEMAC to own 100% of its foreign exchange reserves (against 50.0% currently), and withdrawing French representatives from BEAC's decision-making and supervisory bodies.
  • At the one-day Cemac Heads of State summit, the President of the Central African Republic, Faustin Archange Touadéra, pledged to respect the rules governing the financial environment of the Economic and Monetary Community of Central Africa (Cemac) concerning cryptocurrencies.
  • On Tuesday, March 21, Cameroon's Prime Minister signed a decree revising the minimum wage in the country. The minimum wage for government employees covered by the Labor Code was raised from CFA36,270 to CFA41,875, up by 15.5%.
  • Employees in the agricultural and related sectors, which according to official data represent the largest workforce in the country, will see their minimum wage increase by 24.1% from CFA36,270 to CFA45,000. Meanwhile, in the non-agricultural sectors, the minimum wage was raised by 65.4% to CFA60,000.
  • According to the Cameroonian government, the deadline for online company tax reporting and payment of tax balances over the national territory has been extended by 12 days. The old deadline was March 15, thus the new deadline is March 27.
  • The government's announcement, according to the finance minister, is intended to alleviate businesses because they already have to pay monthly taxes.
  • The Special Fund for Equipment and Inter-municipal Intervention (Feicom), teamed up with the University of Douala and the Jacky Fely Nafack Institute of Technology to develop an online platform that allows decentralized local authorities (CTD) to collect taxes from street vendors. The project, called Inform'All City, was officially presented on March 21 in Yaoundé.
  • The National Institute of Statistics (INS) reported that the secondary sector in Cameroon had a modest growth rate of 0.8% at the end of the third quarter of 2022. It was noted that the subpar outcome was a result of ineffective power and hydrocarbon production efforts.
  • The INS also highlighted that during the period under review, the production of hydrocarbons in Cameroon dropped by 5.7% q/q due to the 1.7% decline in crude oil production and a 24.6% drop in natural gas production.
  • Additionally, Cameroon's information and communication services expanded by 8.5% q/q in Q3-2022, contributing 0.2% to the GDP of the nation. The performance is the result of the expansion of promotional offers made by carriers to encourage the consumption of internet services and mobile payment methods.
  • According to data from BEAC, the volume of bank credit received by large companies in the CEMAC region dropped by 18.2% y/y in the third quarter of 2022. This volume, although higher than the total sum received by small businesses (SMEs), went from CFA1.2trn in Q3-2021 to CFA952.8bn in Q3-2022.
  • On the other hand, the volume of bank credit granted to SMEs recorded a significant increase of 27.69% over the period, going from CFA337.5bn to almost CFA431.0bn year-on-year.
  • All Bitumen Cameroon Plc, which is developing the bitumen production project in Kribi, in the Southern region of Cameroon, announced it has reached an exclusive license agreement with Austrian Pörner Group, the world leader in bitumen oxidation technology.

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