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Snapshot on the African Economy as @ 130123

Jan 13, 2023   •   by United Capital Research   •   Source: United Capital   •   eye-icon 220 views

Anglophone West Africa

 

Nigeria

  • On the 21st of Dec 2022, the Governor of the Central Bank reviewed upwards the maximum weekly limit for cash withdrawal across all channels by individuals and corporate organisations to N500,000 and N5.0m respectively. On that note, over 20 Deposit Money Banks (DMBs) have begun the implementation of the Central Bank of Nigeria’s new cash withdrawal limit policy across the country.
  • Earlier in the week, Airtel Africa Plc disclosed that the company has completed payment for its Fifth Generation (5G) network license in Nigeria. The firm paid $316.7mn for the 5G license and 4G spectrum to the Federal Government through the Nigerian Communications Commission (NCC). 
  • The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has announced the commencement of its 2022 mini-bid round. The mini-bid round, which presented seven blocks on offer, is an opportunity to ignite new exploration and drilling activities in Nigeria’s deep waters.
  • Furthermore, the NUPRC is expected to manage the mini-bid round process in line with the provisions of the Petroleum Industry Act (PIA), the 2022 Petroleum Licensing Round Regulations, and other relevant laws.
  • According to the Lagos Chamber of Commerce and Industry (LCCI), economic conditions across regional blocs show that a recession or a significant slowdown of growth in 2023 is likely, owing to spiralling inflation, high energy cost, monetary policy tightening, and weakening consumer demand.
  • On oil-related news, earlier in the week, the authorities of the Tai Local Government Area of Rivers State uncovered a pipeline used by illegal refiners to steal crude oil in the Nonwa-Uedume community of the state.


 Ghana

  • According to inflation data released by Ghana Statistical Service, the country’s consumer price index climbed more than expected in Dec-2022, printing at 54.1% y/y vs an estimate of 51.8% y/y, and 380bps higher than Nov 2022’s 50.3% y/y print.
  • In addition, we note that Ghana’s inflation rate surged more than expected in December, driven by steep increases in food, transport and housing costs.
  • According to the co-head of emerging markets at Mackay Shields UK LLP, Philip Fielding, a G20 common framework approach to debt restructuring is likely to erode recovery values in the bonds being restructured.
  • He further stated that the framework aims to treat all creditors equally and agree the same terms with all creditors, which is notoriously difficult, as the case of Zambia has shown, but Ghana’s creditor mix is different with the notable absence of significantly large Chinese creditors, and the existence of a bond that was issued with a guarantee from the World Bank.
  • Ghana last month included local individual investors in its proposal to swap 137.3bn cedi ($12.5bn) of debt, expanding it beyond institutions. Investors have been asked to accept losses on interest payments and voluntarily agree to the plan by Jan. 16.
  • A group formed by local individual investors in Ghana is asking bondholders to reject a government plan to restructure $12.5bn of its cedi-denominated obligations. 
  • According to the World Bank President, there should be a payment standstill extending to interest and penalties for nations seeking to restructure debts using the Group of 20’s Common Framework mechanism.

 

Francophone West Africa

 

Ivory Coast

  • Bloomberg reports highlighted that Cocoa farmers in top producer Ivory Coast are starting to worry that the seasonal dusty Harmattan winds will hurt the harvest as dryness affects trees and the soil. In addition, concerns are now mounting about bushfires in some regions.
  • Ivory Coast raised $228 million, listing part of its stake in the local unit of Orange SA on the West African stock exchange, becoming the regional bourse’s second initial public offering in three years.
  • BRVM Chief Executive Officer Félix Edoh Kossi Amenounve iterated to other state-owned companies that it is essential to come to the market.
  • According to figures released by the West African nation's association of cocoa exporters, or Gepex, Cocoa-bean arrivals at Ivory Coast's chief export port of San Pedro jumped 13.0% y/y. 1.4mn metric tons of beans arrived at the port between 1st Oct 2022, and 8th Jan 2023, up from 1.2mn tons in the same period a year before.


 Senegal

  • The National Agency of Statistics and Demography revealed that Senegal's consumer prices rose by 12.8% y/y in December versus the 14.1% y/y increase recorded in November.
  • The Federal Government of Senegal lifted prices on subsidised fuels for a second time after last year’s surge in oil to alleviate a squeeze on the government’s budget. As of January 7, a litre of diesel costs 755.0 CFA francs ($1.23), up from 655.0 CFA francs. The price of unleaded fuel rose to 990.0 CFA francs from 890.0 CFA francs. 
  • The Executive Board of the International Monetary Fund (IMF) completed the Sixth and Final Review under the Policy Coordination Instrument (PCI) and the third and final reviews under the Stand-by Arrangement (SBA), and the Arrangement under the Standby Credit Facility (SCF). The completion of the reviews enables the immediate release of about $215.96mn (SDR161.8mn, or about FCAF133.0bn) loan to the country.


 Mali

  • Mali’s junta leader suspended the prison sentences of 46 Ivorian soldiers arrested last year, ending a diplomatic spat with neighbouring Ivory Coast that risked further destabilising West Africa’s volatile Sahel region.
  • The Interim President of Mali, Assimi Goita, received a verbal message from the Algerian President Abdelmadjid Tebboune on ways to promote and develop bilateral relations between the two countries and accelerate the pace of implementing the agreement on peace and reconciliation in Mali emanating from the Algiers process.

 

East Africa

 

Kenya

  • According to the Treasury Principal Secretary, Chris Kiptoo, Tax collection for the first five months of the 2022-23 fiscal year was KSh786.5bn, compared with the KSh818.7bn target. Income tax was KSh342.5bn, KSh30.4bn short of the target. The 2022-23 budget set revenue collection target at KSh2.45trn.
  • Kenya’s treasury projects economic growth of 6.1% this fiscal year 2022-23 vs est. 5.5% in 2021-22. This is as farming recovers and private investment improves. The Government aims to reduce budget deficit to 5.8% of GDP in 2022-23, and 4.3% of GDP in 2023-24.
  • Government plans to increase revenues to 17.8% of GDP in 2023-24, from est. 17.3% in 2022-23. Expenditures are projected to decline to 22.4% of GDP in 2023-24 and 21.7% in 2025-26, compared with est. 23.3% in current fiscal year.
  • According to the Tea Brokers East Africa, at the 3-4 Jan weekly sale, in Mombasa, average tea price rose 1.4% from the last auction of 2022 to $2.25/kg. 
  • According to Kenya Tea Development Agency, Kenya’s earnings from black tea exports for 2022 are estimated at KSh150.0bn compared with KSh136.0bn in 2021. It follows reforms that came into effect in Jan-2021, requiring buyers and exporters to add value to tea shipments


 Rwanda

  • According to the National Institute of Statistics of Rwanda, urban CPI rose 21.6% y/y in Dec-22 vs 21.7% in Nov-22.
  • According to the agricultural export board, the average price of Rwandan coffee sold for export rose by 33.0% w/w on 6-Jan. Coffee beans sold for an average price of $7.20/kg. Coffee accounts for 60.0% the country’s foreign exchange earnings. According to the U.S. Department of Agriculture, Rwanda’s coffee production is forecast to fall 7.1% in 2023.


 Tanzania

  • According to the National Bureau of Statistics Tanzania, Tanzania’s consumer prices rose 4.8% y/y in Dec-22 vs 4.9% in Nov-22.


 Uganda

  • According to the Minister of State for Information, the cabinet approved the signing of production sharing agreements with state-run Uganda National Oil Co. for the Kasuruban block and with DGR Energy Turaco Uganda SMC for the Turaco block.
  • Uganda foreign travel spending rose 9.0% y/y in Q3-2022 to $209.7mn, and up 149.0% from 2020, according to balance of payments data from the Bank of Uganda. Foreign spending (travel credit), which makes up 53.0% of the services balance of the current account, rose 48.0% y/y.
  • According to the Bank of Uganda, the country’s current account deficit widened to $1.1bn in Q3-2022 from $847.5mn in Q2-2022.

 

Southern Africa

 

South Africa

  • South Africa’s National Treasury has lowered its economic growth forecast for 2022 from 1.9% to 1.6%. This is on the back of electricity supply constraints weighing on the economic growth outlook. GDP growth is expected to average 1.7% between 2022 and 2025.
  • According to Statistics South Africa (SSA), manufacturing production fell by 1.1% y/y in Nov-2022, following a +1.0% y/y in Oct-2022. On a monthly basis, manufacturing production rose by 2.0% m/m, rebounding from the 6.2% m/m contraction in the previous month.
  • According to the World Bank, growth in SSA is expected to be pulled back by subdued growth in South Africa’s economy. South Africa, the region’s second-largest economy, is estimated to expand by 1.9% in 2022 (compared to the 3.1% estimates for Nigeria and Angola) due to electricity shortages and the impact of policy tightening.
  • South Africa’s state-owned power utility, Eskom Holdings, plans to remove 6,000.0MW from the national grid until further notice due to breakdowns at the power stations and severe capacity constraints. This implies that South African citizens will only have electricity for c.6 hours per day.
  • The South African Finance Minister, Enoch Godongwana, noted his optimism that the regulatory amendments set up to address the country’s shortcomings in tackling illicit financial flows will help avert being placed on a global financial watchdog list.
  • President Cyril Ramphosa is expected to lead a delegation from South Africa to the World Economic Forum (WEF) scheduled for 20-Jan at Davos, Switzerland. WEF is an international organisation focused on public-private cooperation. The theme for this year’s meeting is "Cooperation in a Fragmented Society".


 Angola

  • Angola and China have signed an agreement for $249.0mn funding to support broadband project implementation in Angola. The loan was made available without oil collateral and is in line with the strategy adopted by the government for public debt management to secure its sustainability.
  • According to the World Bank, Angola’s oil production stabilised in 2022, thus supporting the economy to grow by 3.1%, up from 0.8% in the prior year. Notably, the bank forecasts the economy’s growth to slow to 2.8% on average in 2023-2024.


 Zambia

  • The Zambian President has appealed to the Angolan deputies to make inclusive laws that guarantee the rights of citizens and legislation that supports the desire for joint investment between the two countries.
  • In addition, the President noted that the country is interested in investing in the Lobito refinery, under construction in Benguela province (Angola). This is in line with the government’s plan to import fuel from its neighbouring country, Angola, rather than from other parts of the world.


 Zimbabwe

  • Zimbabwe and Indonesia plan to strengthen their relations through initiatives such as Preferential Trade Agreements (PTA) between the two countries and the easy set-up of businesses by Indonesians in the country.
  • Environmentalists have urged the Zimbabwean government to establish competent environmental courts to comprehensively prosecute those who ignite bush fires.

 

Central Africa

 

Cameroon

  • The European Commission Last week banned imports of seafood caught in Cameroon’s waters or caught by ships flagged there. It labelled the West African country as "non-cooperating" in the fight against illegal, unreported imports, and unregulated fishing.
  • In addition, the commission gave Cameroon a "red card" and said EU member states would turn away seafood shipments from Cameroon, even when it has catch certificates validated by the national authorities.
  • Stephane Dujarric, the chief spokesman for UN Secretary-General Antonio Guterres, revealed that the United Nations had released $6.0mn in emergency funding to aid thousands of victims of floods and violence in Cameroon.
  • According to a report released by the National Cocoa and Coffee Board, the lower presence of buyers at Cameroon's chief port of Douala has pushed prices for arabica coffee down. A kilogram of beans sold for XAF2,132 ($3.32), falling 2.0% d/d from XAF2,177.0 on Wednesday.
  • According to media reports, Cameroon's second-largest employer, the state-run Cameroon Development Corporation (CDC), is calling for thousands of plantation workers who fled the country's separatist conflict to return to work. About half the company's 20,000 workers left more than four years ago over unpaid wages and after deadly and brutal attacks.
  • According to Bloomberg reports, Cameroon is scheduled to load 57k b/d combined of Kole and Lokale crude in February, up from 31k b/d in January.
  • The Cameroonian Directorate General of Taxation has released the consolidated text of the General Tax Code.

 

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