By United Capital Research
Anglophone West Africa
Nigeria
- According to Fitch Solutions’ Nigeria 2022 consumer outlook, despite the erosion of value of the currency and associated inflation, total household spending in nominal terms will reach N150.9bn in 2022″ largely due to higher prices. This tallies with the World Bank’s earlier prediction that Nigeria may have one of the highest inflation rates globally in 2022.
- A $3.2bn worth public-private concession agreement has been finalized between the Nigerian Customs Service (NCS) and Trade Modernization Project Limited. The agreement is for the digital transformation of the Customs service’s operations. The is estimated to generate $176.0bn for the Federal Government.
- Nigeria’s crude oil production rose by 70,000 bpd in May according to a Reuters survey released on Tuesday (31-May-2022). According to the report, the country’s crude oil production averaged 1.42mbpd in May.
- According to Bloomberg, although Eurobond investors had anticipated Nigeria outperforming peers due to the surge in oil prices, the advantage was wiped out by the government’s rising fuel-subsidy costs.
- A resident representative of the International Monetary Fund (IMF) in Nigeria, Ari Aisen, stated that if the government fails to improve revenue generation by 2026 the country would spend 100% of its revenue on debt servicing.
Ghana
- Ghana has moved to extend a ban on grain exports to Sep- 2022. The ban, which was initially introduced in Sep-2021 to ensure food security, has now been extended due to the Russia-Ukraine war’s impact on food prices.
- Last week, the Bank of Ghana sold $50.0mn at the FX auctions after bids of $175.8m. The FX sale was oversubscribed by over 2.5x.
- The Bank of Ghana has begun a pilot program to test digital currency, e-Cedi offline.
- According to the Governor the Bank of Ghana Ernest Addison, digitizing the offline transactions of rural and frontier households holds the key to creating the necessary market linkages that could result in access to finance in future.
- According to Bloomberg Intelligence, Ghana’s debt-to-gross domestic product ratio is currently at 80%. Against Nigeria, Ghana, is expected to outperform as the fiscal backdrop begins to improve.
- Analysts at Morgan Stanley such as Neville Mandimika have advised investors to buy Ghana’s dollar securities maturing in 2032 and pit them against Nigeria’s due in 2031.
- Ghana’s current account deficit narrowed markedly in Q1-2022 due to relatively stronger export growth. Gold, oil, and cocoa exports performed well. Growth in the import bill was much milder, despite sharply rising imports of refined petroleum.
Francophone West Africa
Ivory Coast
- According to Bloomberg, Ivory Coast sold 30.6bn CFA francs ($50.0mn) of bills with a 2.7% yield due on 29-Nov-2022. Subscription rate from investors was 1.2x times the offer sold.
- Ivory Coast cocoa regulator Le Conseil du café-Cacao sold 1.4m tons of cocoa at negative country premium for the 2022-23 season.
- According to Bloomberg, sales for the 2021-22 season totaled about 1.2m tons by late June last year.
East Africa
Kenya
- The Monetary Policy Committee (MPC) of the Central Bank of Kenya decided to hike its key repo rate by 50bps to 7.5%. The 50bps hike is the first in seven years. The statement from the apex’s bank governor stated the increase is necessary to curtail the elevated inflationary risks and supply chain disruptions.
- Kenya’s National Bureau of Statistics released the nation’s May inflation numbers. Inflation for the month of May climbed to 7.1%, a 6bps increase from the previous month.
- Kenya’s Treasury Secretary, Ukur Yatani, adjured for an adjustment to the finance act, in bid to raise the debt ceiling from Ksh9.0tn to Ksh10.0tn. This is to enable borrowing of approximately Ksh846.0bn to finance the government budget deficit for the financial year starting July 1st.
Rwanda
- The latest trade data published by the National Institute of Rwanda (NISR) indicates that the trade deficit expanded to $230.4mn in April as export earnings dropped 20.2% m/m.
Uganda
- The Ugandan Bureau of Statistics released its inflation numbers with consumer prices rising 6.3% y/y, an increase from the 4.4% recorded in the previous month. The surge in inflation was driven by skyrocketing food and energy prices.
- The Ugandan apex bank hiked interest rates for the first time in two years at its recent policy meeting, opting for a 100bps increase, bringing the benchmark rate to 7.5%.
- The Ugandan Revenue Authority Commissioner said the nation aims to increase its tax to GDP ratio to 18.0% by 2024. This is to enable the country to generate adequate Revenue to reduce its debt levels. In the most recent data, tax to GDP ratio dipped to 11.4% from pre-pandemic levels of 12.1%.
Tanzania
- A loan worth $550.0mn from the World Bank is in the pipeline to help Tanzania alleviate its infrastructure bottlenecks, enhance its role as a transit country, and bolster a recovery in the tourism sector.
- Fuel Prices declined this week as subsidy inflows amounting to $43.0mn came into effect. According to a statement from the Energy and Water Utilities Authority, retail price of Petrol and Diesel declined by 4.6% and 10.0% respectively while the price of kerosene remained unchanged.
- The Tanzanian government increased the lump sum rate for pensioners from 25.0% to 33.0%. A statement from the Office of Labour, Employment, Youth and Disabled highlighted that the new rate will take effect July 1, 2022.
Mozambique
- According to the Ministry of Agriculture and Rural Development, the country lost over 244,000 hectares of crop produce because of erratic climatic conditions. The losses affected the income of approximately 189,000 small producers.
- Earlier this week, Mozambique Chamber of Commerce and Rwanda’s Private Sector Federation signed MoU to boost trade, investment between members of the private sector in both countries.
Southern Africa
South Africa
- According to Bloomberg reports, the expansion of the manufacturing and mining sector resulted in for the first time in 7 years, a decline in the unemployment rate to 45.5% from 46.2%. Meanwhile the jobless rate fell for the fourth quarter consecutively to 34.5% from 35.3%
- According to information on the South African Reserve Bank’s bank website, the government starting on June 8, 2022, will undergo a 12-week transition into a simpler monetary policy implementation framework.
- The United Kingdom is reportedly considering guaranteeing $1.0bn to help support South Africa in its plan to diversify away from coal usage. Similarly, the African Development Bank (AfDB) has submitted a proposal to manage $8.5bn of the funds.
Angola
- The Angolan apex bank’s governor reiterated that the country’s current monetary policy rate is sufficient to curtail inflation. Hence, the committee decided to maintain its benchmark interest rate at 20.0%. Reserve requirement on national currency reduced to 19.0% from 22.0%. Reserve requirement of foreign currency remained unchanged.
- The Governor also highlighted it forecasts that the Angolan economy will expand its GDP by 2.5% in 2022.
Zambia
- According to the recently released inflation report for the Zambian economy, consumer prices rose 10.2% y/y in May, in contrast to the 11.5% y/y rise in April. Meanwhile, m/m, prices rose 0.8% versus +0.7% m/m in April.
- Effective June 1st, petrol prices rose by 3.3% to ZK24.9/litre. The prices of kerosene and diesel remain unchanged.
Zimbabwe
- The Zimbabwe National Statistical Agency in a statement highlighted that the country’s export earnings rose by 5.3% to $587.3mn in April while imports fell 10.7% to $637.2mn.
- According to a Bloomberg report, the Zimbabwe dollar weakened beyond Interbank rates for the first time. It traded at Z$301.49/USD on the interbank market while it traded at Z$308.52/USD at the weekly foreign-currency auction.
- On track to meet its 40-ton gold production target, the country’s gold output jumped 80.0% y/y to 2.999kg in May.
Central Africa
Cameroon
- According to Continental Infos reports, Cameroon’s temporary ban on exports of cereals and other staples such as cement to neighbouring countries is threatening famine in Central African Republic.
Chad
- According to Bloomberg, the International Monetary Fund (IMF) has urged creditors such as Glencore Plc to complete an agreed restructuring of Chad’s $1.0bn in private debt.
- The IMF warned that delays in the debt restructuring since last year are preventing the nation from supporting its economy and its people by not benefitting from higher oil prices.
Democratic Republic of Congo (DRC)
- According to Bloomberg, the Democratic Republic of Congo is considering establishing a stabilization fund to protect its booming mining industry.
- According to the Minister of Mines, Antoinette N’Samba Kalambay, the fund will ensure the industry is not undermined by external events such as the Russia-Ukraine war or any pandemic.