Snapshot of the African Economy as @ 140521

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Friday, May 14, 2021/ 03:00PM / United Capital Research / Header Image Credit: Global Cosmetics


Anglophone West Africa

Nigeria

  • According to a report from the World Bank, remittances into Nigeria declined by 21.7% y/y in 2020 to $16.8bn, from $21.5bn in 2019. Nigeria's remittance collection of $16.8bn represents 40.0% of the entire sum of $42.0bn collected in the Sub-Saharan Africa (SSA) region. Meanwhile, total remittances into SSA region declined 12.5% y/y. The decline in remittance collections reflects the impact of the pandemic on the earnings of Africans living abroad.
  • During the week, the National Bureau of Statistics released data on Company Income Tax (CIT) collections for Q1-2021. According to the report, total CIT collections rose 32.8% q/q and 32.8% y/y to N392.8bn from N295.7bn in Q4-2020 and N295.7bn in Q1-2020. The strong growth in CIT collections is impressive, indicating sustained rebound in business activities.
  • According to officials of the Federal Ministry of Mines and Steel Development, concerted efforts have been directed towards exploiting Nigeria's mineral resources, as the government focuses on diversification from crude oil. According to them, studies conducted found huge deposits of gold in Zamfara and Osun while studies are being conducted in other states. Also, efforts are being set in place to ensure these resources are revenue generating.
  • Excerpts from the personal statement of one of the Monetary Policy Committee's members stated that 83.0% of banking sector creditors were able to access credit at less than 15.0% in Feb-2021.
  • The Presidential Economic Advisory Council (PEAC) has faulted certain provisions in the Petroleum Industry Bill (PIB). Some of the components of the bill which it faulted includes the recommendation that the Federal Government should own 100.0% shares in the Nigerian National Petroleum Corporation (NNPC) Limited. According to the PEAC, the ideal scenario will be for the NNPC to be set for an initial public offering so that the company can raise its own capital. It also recommends the appointment of more independent directors on the board to improve corporate governance.
  • Furthermore, the PEAC recommended that only one regulator should be set up to regulate the oil & gas industry. The bill currently provides for two regulators, one to oversee upstream activities and another to oversee midstream and downstream activities. According to them, the single regulator can have different departments to coordinate activities of separate segments of the value chain in a synergized manner.
  • The Transmission Company of Nigeria (TCN) confirmed that the national electricity transmission grid suffered its second collapse in six months.

 

Ghana

  • Ghana's annual consumer inflation fell to a 13-month low in Apr-2021, down to 8.5% from 10.3% in Mar-2021, closer to the middle of the BOG's inflation target range (6.0% - 10.0%). Driving the decline in inflation, annual food inflation which kept headline inflation above 10.0% for a long period slowed to 6.5% in Apr-2021 from 10.8% in Mar-2021.
  • However, outlook for inflation in the short term sees some near term pressures as new tax measures that took effect on May 1 and rising oil prices (feeding higher fuel cost) could exert upward pressure on inflation.
  • Reports claim the prolonged dry season in Ghana has weighed on power generation from the country's hydropower plants. The resultant electricity shortages have hampered economic activities through periodic outages and reduced exports.
  • According to IHS Markit, Ghana's Purchasing Manager's Index (PMI) for April indicated an expansion in private sector activities for the ninth consecutive month. Despite the sustained momentum, Covid-19 related restrictions continue to weigh business conditions within the country.


Francophone West Africa (WAEMU)

 

Ivory Coast

  • Ivory Coast Prime Minister Patrick Achi has been admitted into hospital following post-surgery complications.
  • Following the news, the average yields on Ivorian Eurobonds grew by 6bps to close at 5.25%.
  • The Head of Ivory Coast's Cocoa & Chocolate industry regulator told Reuters it asked cocoa and chocolate companies in Ivory Coast and Ghana to pay more in premiums to support farmers' wages.
  • Ivory Coast and Ghana, which together produce about two-thirds of the world's cocoa, introduced a $400 per tonne premium this season termed the Living Income Differential (LID) to increase wages for farmers, many of whom live in poverty.

 

Senegal

  • United States Trade and Development Agency (USTDA) has allocated a grant of just under $1.0m to fund feasibility studies for large-scale battery storage projects in Mozambique and Senegal.

 

East Africa

 

Ethiopia

  • The Ethiopian Roads Authority (ERA) has announced that it will soon start the construction of the Adama Awash Road, which is expected to be part of Ethiopia's fourth expressway.
  • In the first nine months of the current Ethiopian budget year, Ethiopian insurance companies collected 11.3bn birr in insurance premiums, an increase of c.21.0% y/y.


Kenya

  • The Nairobi Securities Exchange (NSE) launched its Unquoted Securities Platform (USP). The USP facilitates the trading, clearing and settlement of securities of unlisted companies in Kenya.
  • The Institute of Pension Management (IPM) and the School of Pension and Retirement Studies (SPRS) announced a partnership to offer financial literacy training, to individuals and corporates with a focus on pension matters. The program intends to train at least 10,000 people over 3 years.
  • Kenya has suspended all commercial and cargo flights to and from Somalia with effect from 11th May 2021 until at least 9th August 2021, with the exemption of flights from Somalia to other destinations which pass through the Kenyan airspace.
  • Uber Technologies Inc. has raised fares in Kenya (and Nigeria) in response to agitations from drivers for a higher share of commissions to compensate for increased operational costs, particularly petrol


Tanzania

  • KCB Group announced plans to spend a total of KSh6.0bn to acquire two banks in Rwanda and Tanzania from London-listed Atlas Mara limited.
  • The Nairobi Securities Exchange-listed firm had earlier estimated it would acquire a 62.0% stake in Banque Populaire du Rwanda Plc (BPR) and a 100.0% ownership in African Banking Corporation Tanzania Limited at a cost of $40.0m (KSh4.2bn).
  • The Tanzanian Minister of Agriculture announced that the government will invest Sh10.6bn in the 2021/22 financial year to increase production of seed crops, including those used in edible oil production.
  • NMB Bank Plc has partnered with Metropolitan Life Tanzania and Sanlam Life to launch two new insurance products. The move is intended to raise insurance penetration in Tanzania, which is currently estimated at c.0.6%.

 

Southern Africa


South Africa

  • Statistics South Africa disclosed that South Africa's mining output surged 21.3% y/y in Mar-2021, compared to a revised contraction of 2.3% in Feb -2021.
  • Following the sacking of its General Secretary, the ruling party, African National Congress (ANC), has appointed Jessie Duarte as the party's new general secretary after suspending Ace Magashule, following allegations of corruption.
  • Manufacturing and FMCG giant Tiger Brands posted a 55.0% y/y increase in profit.
  • South Africa's Rand rose to a 16-month high against the US dollar on Monday after Moody's left its sovereign ratings unchanged. An improving political environment and the global market risk-on sentiment provided further support.
  • Lastly, the South African Reserve Bank (SARB) is set to keep repo rates unchanged in May-2021 following a Reuters poll of 25 economists. Inflation forecasts were firmly behind most analysts' "HOLD" forecasts, indicating inflation is yet to reach a concerning level. SA's inflation forecasts were comfortably inside the SARB's target range of 3.0% - 6.0%.


Zambia

  • The Zambian Minister of Health Jonas Chanda has disclosed that China has offered Zambia its Sinopharm Covid-19 vaccines as a contribution towards the nation's vaccination program. This follows as the World Health Organization (WHO) recently approved China's Sinopharm vaccine as safe and effective for emergency use.
  • Zambia's finance ministry said that it had reached a broad agreement with the International Monetary Fund (IMF) on macroeconomic parameters, fiscal targets, and policy objectives during talks to secure a lending programme.


Zimbabwe

  • In a bid to attract increased private investment, the Zimbabwean government has reformed its cannabis cultivation law. It has eliminated requirement for private investors to be in co-ownership with the government to cultivate cannabis. Investors can now own 100.0% of their investments and locate their facilities anywhere in the country without prescription.
  • Zimbabwe's government and commercial farmer's union of Zimbabwe have signed amendments to a deal allowing the state to delay compensating former white producers evicted from their land two decades ago.

 

Angola

  • In the past week, Angola's Ministry of Health disclosed it had approved Sputnik single-dose vaccine in a bid to boost its vaccination program.
  • According to the Instiituto Nacional de Estatistica, Luanda Consumer Price Index rose by 27.7% in Apr-2021.

 

Central Africa (CEMAC & Congo DRC)

Cameroon

  • Maviance Plc, a Cameroon-based fintech has announced the closing of its $3.0m investment round from the Pan-African digital payments hub, MFS Africa, with the payment’s hub coming on as a strategic investor. The funds will be used to expand the company’s footprints across Cameroon and drive expansion into other Central African Economic Region (CEEMAC) countries.
  • According to data compiled by the National Cocoa and Coffee Board (ONCC), price of robusta coffee now trades at multi-month highs of between XAF525.0/kg - XAF575.0/kg in May-2021 from XAF300.0/kg in May-2020. The surge in price has been driven by limited supply given farmers substituted production of robusta coffee with food crops deemed more profitable in the face of declining robusta coffee prices in 2020.


Gabon

According to data from International Energy Agency (IEA), crude oil production in Gabon grew to 190,000b/d in Apr-2021, from 180,000b/d in Mar-2021. 

 

Francophone West Africa (WAEMU)


Ivory Coast

  • Uhuru Investment Partners (Uhuru), a small-business focused private equity group, announced the completion of its fundraising for Uhuru Growth Fund I (Ugf), which raised $113.0m.
  • Sea-Invest, a logistics group, announced that FCfA22.0bn would be invested in various major projects in Yopougon, San Pedro, and in the growth of Abidjan's lagoon transport activity for bulk goods.

 

East Africa


Ethiopia

  • According to the Commercial Bank of Ethiopia (CBE), demand for digital banking services in Ethiopia has increased. The CBE president attributed the increase to efforts aimed at encouraging digital banking amid the disruption caused by the Covid-19 pandemic.
  • Isaias Lema, Crop Production Director at the Ministry of Agriculture, stated that the Ethiopian government would continue to import wheat until irrigation development projects substitute the country's wheat imports over the next three years.

 

Kenya

  • The Stanbic Bank's Kenya Purchasing Manager’s Index (PMI) for Apr2021 plunged to 41.5 from 50.6 in Mar-2021. Notably, this is the lowest reading since May-2020, showing that Kenya's private sector activity during the month of April dropped to its weakest level in 11 months. 
  • The decline is due to travel limits and extended curfews implemented in five counties at the end of March.
  • International Finance Corporation (IFC) has announced plans to lend $25.0m (KSh2.7bn) to Stellar Warehousing and Logistics Limited, a Real Estate development firm in Kenya.
  • According to a Mastercard research, cryptocurrency adoption in Kenya is increasing, in line with consumer demand for novel, quick, and flexible digital experiences.
  • Uber Technologies announced the launch of electric 'BodaBodas' and bicycles for drivers on UberBoda, Uber Connect, and Uber Eats in Kenya. Uber estimates that the electric micro-mobility vehicles will provide 45.0% reduction in operating cost for drivers.
  • Goodwell Investments, an impact investment firm, has unveiled a $60.0m fund targeted at fast-growing, scalable small and medium-sized enterprises (SMEs) in Africa.


Uganda

  • According to the Uganda Bureau of Statistics, consumer prices in Uganda rose 2.1% y/y in April, down from 2.7% y/y in March. Notably, the inflation rate has slowed for the first time in three months.
  • I&M Holdings is said to have completed the acquisition of c.90.0% of Orient Bank, a Ugandan commercial bank.

 

Tanzania

  • Tanzania and Kenya have reached an agreement to remove cross-border trade barriers that have hampered the free movement of people and goods between the two countries. The decision was reached during bilateral talks between President Uhuru Kenyatta and Tanzanian President Samia Suluhu Hassan on her maiden visit to Kenya on May 4, 2021.
  • Tanzania hopes to complete a $30 billion liquefied natural gas (LNG) project within six months, after President Samia Suluhu called for the resumption of talks that had been stalled for more than a year.

 

Southern Africa

South Africa

  • Payment giant, Paystack has expanded into South Africa, seven months after acquisition by Stripe.
  • Following all regulatory procedures, Grobank Limited has been officially renamed Access Bank South Africa Limited. The deal was finalised after Access Bank's acquisition of controlling shares in the former Grobank Limited, South Africa.
  • The Secretary-General of South Africa's African National Congress (ANC), Ace Magashule, has refused to comply with his suspension after being charged with corruption.
  • Ace Magashule denies the charges and said that he had instead suspended President Cyril Ramaphosa.


Zambia

  • Following news reports that a lack of capital had halted production in one of its Konkola Copper Mine, the state-appointed provisional liquidator of the copper mine refuted the claims, stating that the mine has not been temporarily or permanently shut.
  • Zambia held a treasury bills auction where the Zambian government sold Zk380.4m, ZK127.5m, ZK116.3m and Zk968.6m, across four different tenors , which closed at the 14.0%,16.0%, 20% and 25.7%, for the 91-day, 182-day, 243-day and 364-day respectively.

 

Zimbabwe

  • According to Fidelity partners and refiners, a unit of the Zimbabwe Central Bank, Zimbabwe’s gold deliveries fell 25.0% y/y to 5,362.4kg in the first four months of the year.
  • Zimbabwe plans to list a $250.0m Infrastructure Development Bank of Zimbabwe bond on its local exchange.
  • The bond listing would be the first listing of the Zimbabwe government in 20 years. Proceeds from the capital raise will be used for the expansion and upgrade of the main highway that links the country to its largest trading partner.

 

Namibia

  • Namibia sold N$550.0m($38.0m) of bills due May 2022. Investors' appetite was strong as the offer was oversubscribed by 2.6x.
  • Telecoms Namibia's broadband subscriptions grew by 14.0%, whilst revenue grew by 7.0% y/y in 2020.
  • According to the Namibia Statistics Agency (NSA), Namibia total merchandise trade increased to N$15.7bn in March, a 4.4% increase from N$15.1bn in February.

 

Angola

  • Consultancy firm, Fitch, projects Angola growing 1.7% in 2021 and 3.3% in 2022. Furthermore, Fitch is projecting inflation to moderate to 19.7% and 14.2% in 2021 and 2022. The average inflation in 2020 was estimated at 22.7%.
  • In the past week, Total and the Angolan National Oil, Gas and Biofuels Agency announced the start of phase two of its existing Oazfor Floating Production Storage and Offloading (FPSO) project. The project includes the drilling of nine wells and is expected to have a production output of 40,000 bpd by mid-2022.

 

Central Africa (CEMAC & Congo DRC)

Cameroon

  • The National Institute of Statistics (INS) announced a rebasing of the country's GDP numbers. The rebasing exercise now takes 2016 as the base year as against the use of 2005 previously.
  • Following the rebasing exercise, actual GDP growth for 2020 now prints at 3.6% compared to the prior 0.8% economic growth. Furthermore, the country's debt-to-GDP ratio now prints at 43.7% compared to 46.9% at the end of 2020.
  • In more data-related news, the INS announced that Consumer Price Index (CPI) for Douala, the nation's economic capital, grew by 0.2% in Mar-2021, higher than the 0.1% recorded in Jan-2021 and Feb-2021.


Gabon

  • According to loading plans compiled by Bloomberg, Gabon plans to increase exports of its rabi blend crude to 63,000 b/d in Jun-2021, making it the highest export level of the blend since Oct-2020.

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