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Snapshot on the African Economy as @ 030323

Mar 03, 2023   •   by United Capital Research   •   Source: United Capital   •   eye-icon 249 views

Anglophone West Africa

Nigeria

  • Oil marketers under the aegis of the Petroleum Retail Outlet Owners Association of Nigeria have established and deployed a task force to check and sanction filling stations selling Premium Motor Spirit at exorbitant prices.
  • Minister of Power, Abubakar Aliyu, revealed that the Federal Executive Council has approved N39.6bn for various contracts for transmission lines in the ministry of power. The N39.6bn contract comprised of offshore and onshore components of $53.0mn and N15.6bn respectively.
  • According to the Director General of NEMA, Mr Mustapha Ahmed, Nigeria will experience severe flooding this year citing reports from the Nigerian Metrological Agency and Nigeria Hydrological Services Agency.
  • According to the International Monetary Fund (IMF), only 24.0% of loans disbursed under the Anchor Borrowers’ Programme (ABP) of the Central Bank of Nigeria (CBN) have been repaid.
  • In addition, banks credit to the private sector rose to N42.3tn at the end of Jan-2023 from N35.2tn recorded in the corresponding period of 2022. This represents a 20.1% y/y increase as banks continue to aim at stimulating production and productivity across the real sector.
  • According to the Central Bank of Nigeria (CBN), the total amount of currency-in-circulation in the country dropped by 58.1% to N1.4tn as of the end of Jan-2023 from N3.3tn as of the end of Oct-2022 as a result of the naira redesign policy by the apex bank.
  • Dangote Cement Plc, Africa’s largest producer of the building material, is considering selling Eurobonds for the first time to fund its expansion plans. 
  • According to the acting Chief Finance Officer (CFO) Gbenga Fapohunda, any sale will depend on borrowing costs and the availability of foreign exchange in Nigeria, Dangote’s biggest market, where the greenback has been scarce.


 Ghana

  • According to S&P Global Ratings, Ghana stands to ask external creditors to write off as much as 50.0% of the debt it owes them, far higher than the 30.0% the government initially considered.
  • Bloomberg revealed Ghana’s Eurobonds sank to the lowest level in nearly three months, after the country missed a self-imposed deadline to restructure its bilateral debt.
  • Also, Bloomberg revealed that, Ghana’s cedi has been the world’s second-worst performing currency thus far 2023, and is heading for more pain in the short-term, after missing the self-imposed deadline to restructure its bilateral debt and move closer to tapping foreign aid.
  • Finance Minister Ken Ofori-Atta intended to reach a restructuring agreement with bilateral creditors by the end of February to help qualify for a $3.0bn IMF program. So far, Ghana has only partially completed the domestic-debt part of the exchange program. 
  • Earlier in the week, the cedi has slumped 21.0% against the dollar in 2023, the worst performer among more than 100 currencies tracked by Bloomberg after the Lebanese pound.
  • FirstRand Ltd., Africa’s biggest bank by market capitalization, has written off more than half the value of its holdings of Ghanaian bonds as the country grapples with a restructuring of its sovereign debt. 
  • The Bank took a 57.0% haircut on its holdings of Ghana’s local-currency debt and Eurobonds, after announcing a 496.0mn rand impairment provision to cover potential losses from Ghana’s debt revamp and reduced income from associates. The write-down includes domestic and foreign-currency bonds held as of Dec-2022.
  • According to the Ministry of Finance, Ghana had talks with Chinese delegation on three-day mission to Accra, upon request by West African nation to reorganize debt owed the Asian nation.
  • According to the Ministry of Finance, the country will resume payment of coupons and principal on old bonds not tendered during the domestic debt exchange exercise. The new bonds held by investors will become benchmark for the market, and basis for deepening the domestic sovereign bond market.
  • Also, the Nation aims to advance progress of external debt treatment for long-term macroeconomic stability.
  • Consequently, the rating on Ghana’s local-currency debt was upgraded by S&P Global Ratings as the country settles its domestic debt exchange with bondholders. The nation’s foreign debt remains rated in default. Ghana’s local credit score was raised to CCC+ from SD (selective default).
  • According to tanker tracking data compiled by Bloomberg, a tanker Theseus arrived in Ghana’s territorial waters last week Friday carrying about 600,000 barrels of Russian oil from a port in the Black Sea,
  • In the aftermath of Russia’s invasion of Ukraine, almost all European Union (EU) companies were prohibited from buying Russian crude and petroleum products, or providing important services such as insurance to nations that buy such exports above a capped price.
  • Ghana’s Institute for Energy Security called on the West African country’s government to explain how a cargo of Russian oil came to be in the nation’s territorial waters.



Francophone West Africa (WAEMU)

Senegal

  • The Monetary Policy Committee (MPC) of the Bank of West African States (BCEAO) agreed to increase benchmark interest rate from 2.75% on 16-Mar. It is the Bank’s fourth rate hike since Jun-2022 as part of the gradual normalization of its policy.


 Ivory Coast

  • According to Bloomberg, Cocoa futures surged after reports of bean shortages in top-producer Ivory Coast, bucking a broad commodity slump amid a strong US dollar.
  • The most-active contract climbed as much as 3.8% to £2,124 a ton in London, the highest since Nov-2016, before paring gains as a strong dollar depressed most commodities. In New York, it rose as much as 3.8% to $2,759 a ton, the priciest in a year. 
  • According to the Hightower Report, some exporters in Ivory Coast are close to defaulting on their contracts due to a lack of beans, with estimates of as much as 150,000 tons,.


 Mali

  • The government-run Malian Company for Textile Development SA, (CMDT) revealed that cotton harvests in Mali, have been hit by severe flooding and insect infestations, the government-run. Output for the 2022-23 season is now seen at 526,000 metric tons, compared with a forecast in December of 500,000-600,000 tons. More than 32,523 hectares of cotton farmlands have been destroyed by insects, and 35,000 hectares by floods.
  • According to the office of Burkina Faso Prime Minister (PM) Apollinaire Kyelem de Tambela, the PM proposed the creation of a "federation" with Mali during a recent visit to the country
  • Mali's government has ordered the U.N. peacekeeping mission's (MINUSMA) human rights chief to leave the country by Tuesday, declaring him persona non grata in the latest sign of tensions between Mali's leaders and the international community.
  • Cora Gold the London-listed mining company announced is to raise at least $19.6mn through a mix of equity fundraising and convertible loan notes. The company is raising funds for the development of its Sanankoro gold project located in Mali. Cora Gold announced in 2022 that the definitive feasibility study for Sanankoro showed an annual production of 56,000 ounces, with a reserve mine life of 6.8 years. It is estimated to generate $228mn in free cash flow throughout its lifetime.
  • Key statements made by Russia's Foreign Minister Lavrov after his talks with Malian Transitional President Assimi Goita and Foreign Minister Abdoulaye Diop in Bamako include.
  • Russia will develop trade and investment relations with Mali, as well as partnerships in geological exploration, transport and agriculture;
  • The supply of wheat and petroleum products to Mali from Russia is expected to start soon;
  • Russia will continue supporting Mali in improving the African country's armed forces; Moscow will plan an additional delivery of military equipment to Mali, as well as steps to train the Malian military at Russian universities; among others.



East Africa

Kenya

  • Kenya plans to abolish taxes on cooking gas in its clean energy agenda. According to the presidency, removing taxes on Liquefied Petroleum Gas (LPG) will help the country achieve universal access to clean cooking energy by 2030. The government plans to invest c.$200.0mn to build facilities to handle and store liquefied petroleum gas.
  • According to the Kenya Revenue Authority, c.Sh610.0bn (approx. $4.8bn) have been granted tax relief and incentives in the past five years averaging Sh122.0bn annually. The agency plans to audit tax relief processes, assess, and process claims but defer payment disbursement until further notice. 
  • Kenya has lifted a ban on new electricity supply deals as it seeks to add clean generation capacity. The government seeks bids from companies to build power plants using green energy.
  • National Social Security Fund (NSSF) forecasts annual collections will jump by Sh7.0bn to Sh27.0bn ($213.0mn) as mandatory contributions by workers and employers are projected to increase. The Fund also plans to consider investing in foreign-currency-denominated securities to hedge against the depreciation of the local currency.


 Rwanda

  • According to the National Institute of Statistics of Rwanda (NISR), Producer Price Index (PPI) rose to 13.7% y/y in Jan-2023 from 12.9% y/y in the previous month. On a monthly basis, prices were up 1.5% m/m.
  • The Rwanda Central Bank plans to consider easing the pace of tightening its monetary policy rate in the following months as inflationary pressures slow down. This comes a week after the apex bank hiked its benchmark interest rate to a nine-year high at 7.0% from 6.5%.


 Tanzania

  • According to the National Bureau of Statistics, Tanzania’s Gross Domestic Product (GDP) grew by 5.2% y/y in Q3-2022 from the 4.8% y/y growth recorded in the previous quarter. The sectors that contributed significantly to the growth include Transport & storage, Agriculture and Mining & quarrying.
  • According to the Bank of Tanzania (BoT), the country’s M3 money supply rose 12.8% y/y in Jan-2023 from its 11.6% y/y increase in Dec-2022.
  • Tanzania has secured a $151.0mn loan from the International Monetary Fund (IMF) to help boost its economic recovery amidst headwinds from global shocks that have slowed growth. This will bring total financial support from the multilateral lender under the $1.0bn 40-month Extended Credit Facility (ECF) programme to $302.7mn.

 

Uganda

  • According to the Uganda Bureau of Statistics, consumer prices eased for the fourth consecutive month to 9.2% y/y in Feb-2023 compared to its 10.4% y/y print in Jan-2023. This is the lowest reading since Aug-2022, with core inflation slowing to 7.8% y/y from 9.0% y/y in the prior month.
  • Uganda’s railroad agency forecasts a surge in cargo operations as it develops an alternative transit route through its neighbouring country, Tanzania, while reducing its reliance on the Kenyan corridor. Monthly average freight is projected to double to as high as 60,000 tonnes within three years from 25,000 tonnes at current levels.



Southern Africa

South Africa

  • According to Bloomberg reports, South Africa will be added to a global watchdog’s list of nations that have failed to tackle illicit financial flows adequately. The Financial Action Task Force, which polices compliance with anti-money laundering and terror-financing measures, gave its decision on Friday to include South Africa on its so-called grey list.
  • Statistics South Africa (SSA) revealed that South Africa’s unemployment rate fell to its lowest level in almost two years in Q4-2022. The official jobless rate decreased to 32.7% y/y in Q4-2022 from 32.9% y/y in the previous quarter.
  • According to the Automotive Business Council, South Africa's new vehicle sales rose less than economists expected in February. New vehicle sales rose 2.6% y/y (estimate +4.5%) in Feb-2023.
  • Bloomberg reports revealed that Non-residents turned net sellers of South African bonds year-to-date after offloading a net R11.1bn of the nation’s debt in Feb-2023.


 Angola

  • According to the January report of the National Oil, Gas and Biofuels Agency (ANPG). Angola's oil output reached 34.3mn barrels in January this year, representing an increase of 583,16 barrels more than in December 2022. Average daily production was roughly 1.1mn barrels from the total of 1.2mn expected productions.
  • Angola's oil and gas production is forecasted to rise by 3.2% in 2023, the International Monetary Fund (IMF) revealed. Production is expected to rise to 1.3mn barrels daily, up from 1.2mn barrels daily in 2022.
  • Subsea 7 S.A. today announced the award of a large contract by Azule Energy in the Agogo Integrated West Hub Development Project offshore Angola framework.  The contract scope includes transporting and installing approximately 98 kilometres of flexible pipes, 30 kilometres of umbilicals, and associated subsea structures in water depths of around 1,700m.
  • In addition, Yinson Holdings Bhd has inked a firm contract with Eni Angola SpA, a wholly owned subsidiary of Azule Energy, to supply a floating, production, storage and offloading asset for the Agogo Integrated West Hub Development Project in Angola (FPSO Agogo). The contract has an estimated aggregate value of approximately $5.3bn and a firm period of 15 years from the date of the final acceptance, with the option to extend for a further five years.
  • According to a board member Baltazar Miguel of the Angolan state oil company, Sonangol EP is considering an initial public offering on the local stock market and abroad of as much as 30% of its shares.

 

Zambia

  • Reynolds Bowa, the Energy Regulatory Board Chairman, announced that the Gasoline price would rise to 28.52 kwacha per litre from 27.22 kwacha per litre. While the Diesel price will remain unchanged at 29.25 kwacha per litre.
  • Bloomberg reports revealed that conversations are being held between Zambia’s foreign minister, Stanley Kasongo Kakubo, and his Chinese counterpart, Qin Gang, in which they agreed to strengthen practical cooperation between their countries.
  • The Minister of Energy Peter Kapala revealed that Zambia plans to increase its power generation capacity from the current 3,000MW to 10,000 MW in the next ten years.
  • The World Health Organization (WHO) released $285,000 to support Zambia's response to the cholera outbreak.

 

Zimbabwe

  • China Natural Resources announced it agreed to buy Williams Minerals, which owns the mining permit for a Zimbabwean lithium mine, from Feishang Group and Top Pacific (China). It expects to indirectly acquire all interests in Williams Minerals in the second fiscal quarter of 2023 and plans to issue restricted shares as 50.0% of the consideration, with the remaining 50.0% comprised of a promissory note and cash, for a maximum consideration of $1.75bn



Central Africa

Democratic Republic of Congo (DRC)

  • A US District Judge in New York on 28-Feb. ordered Glencore Plc. to pay $700.0mn as a criminal punishment for a global bribery scheme orchestrated by the company in a host of countries, including the DRC.


 Cameroon

  • According to a report from the Institute of National Statistics, Cameroon’s average inflation rose to 6.3% in 2022, exceeding the Central African Economic and Monetary Community’s 3.0% threshold. Prices of imported products increased 5.0% and the cost of local products rose 6.4%.
  • According to the Ministry of Finance, Cameroon is launching a plan to raise CFA35.0bn on the Beac public securities market this month. Information from the Finance department revealed that the first operation, aiming at CFA25.0bn, will be launched on 6-Mar-2023. It will consist of the issuance of 5-year fungible Treasury bonds (OTA) with an interest rate of 5.75%.
  • The remaining CFA10.0bn will be raised through the issuance of 3-year OTAs with an interest rate of 4.25% during an operation scheduled for 27-Mar-2023. Currently, the Beac market seems favorable for long-term borrowing, in terms of costs, subscription rates, and participation rates in operations of market intermediaries such as banks operating as Primary Dealers.
  • Earlier in the week, Cameroon welcomed a delegation of wealthy investors from the Qatari and Emirati royal families, who came to explore the business environment.
  • During their meeting with Finance Minister Louis Paul Motazé, the delegation's spokesman, Fitzgerald Zephyr, said they were most interested in mining, agriculture, textiles, and industries. Attracting such investments will further propel the economic cooperation between Cameroon and these two Arab countries.
  • According to official data from the Ministry of Finance, trade relations between Cameroon and the UAE appear to be limited to massive imports of goods, mainly from Dubai to Cameroon. Direct investment from the UAE to the African country is almost nil.
  • The Special Fund for Equipment and Inter-municipal Intervention (Feicom) announced the deployment of a CFA9.3 billion fund to boost local development in Cameroon. The resources will finance 60 projects in 54 communes.
  • Philippe Camille Akoa, who manages the Special Fund, said the projects will be piloted by the decentralized local authorities of the beneficiary communes.
  • Efforts by the Cameroonian government to accelerate digitalization in the country are bearing fruits. The Minister of Telecoms, Minette Libom Li Likeng revealed recently that, over the past four years, the mobile Internet penetration rate in the country has doubled to reach 34.0%.
  • To achieve this improvement, Minister Libom Li Likeng recalled, Cameroon has made significant investments in infrastructure, especially in fiber optics. The country is now connected to five submarine cables, making it the hub of telecom infrastructure in Central Africa. Currently,15,000 kilometers of fiber are deployed throughout the country.
  • The Cameroonian Aviation Authority (CCAA) launched last February 21 the competitive recruitment of 106 operational security officers (OSA). Paule Assoumou Koki, Head of CCAA, said the process will take place from next 17-Apr-2023 to 6-May-2023.
  • This recruitment is open, we learned, to persons of Cameroonian nationality, aged at least 21 years and 30 years at most, holding a GCE Ordinary level or equivalent degree, having a perfect command of one of the official languages of Cameroon, and having a clean criminal record.

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