#Africa #Markets | 24 Jun

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asia stocks climb pre-G20, oil up on US-Iran feud
  • Asian stocks edge up, Europe seen slightly higher before G20
  • Investors doubtful over meaningful US-China deal at summit
  • Oil higher on US-Iran tensions; light crude firms over 1%

Oil Markets

  • Oil prices climb as US-Iran tensions mount
  • Pompeo says “significant” sanctions will be announced on Tehran
  • Brent up 0.8% at $65.70 a barrel (0655GMT)
  • WTI up 1.2% at $58.13 a barrel

Precious metals

  • Gold hovers near 6-yr peak as dovish cenbanks, US-Iran jitters fuel demand
  • SPDR posts best 1-day pct gain in nearly 11 yrs
  • Spot gold up for 5th session
  • Spot gold up 0.4 pct at $1,403.88 per ounce (0701GMT)
  • US gold futures up 0.5% at $1,407.10 an ounce

Grains

  • Wheat prices for 2nd session on ample world supply, corn firms
  • Most active CBOT wheat futures down 0.4% at $5.28-3/4 per bushel (0116GMT)
  • Most active corn futures up 0.5% at $4.44-1/4 per bushel
  • Most active soy futures up 0.2% at $9.04-1/4 per bushel
  • Most active rice futures down 0.1% at $11.28 per hundredweight

Key African events or data releases today
[Posts & comments at my Twitter handle @DrRafiqRaji]

  • Zimbabwe’s Mnangagwa hosts Wildlife Economy Summit in Victoria Falls; 23-25 Jun [Botswana’s Masisi attending]
  • Nigeria’s central bank governor Emefiele press conference on 5-year plan
  • Nigeria’s SEC new board to be inaugurated; after some 4 years
  • Nigeria’s Osinbajo in US; to meet Pence, Council of Foreign Relations, etc
  • 2nd Ghana Most Respected CEOs Breakfast in Accra
  • Uganda’s Museveni in Beijing; attending China-Africa Economic & Trade Expo
  • South Africa state capture inquiry resumes
  • South Africa PIC inquiry resumes
  • Kenya to repay $750 mln of debut eurobonds

Key African events or data releases over the weekend & early a.m today
[Posted & commented on some headlines below at my Twitter handle @DrRafiqRaji]

  • South Africa’s rand stretches gains as Fed, ECB turn dovish
  • Ruling party candidate declared winner of Mauritania election
  • Australia’s Ausdrill wins $554.6 mln contract in Botswana
  • Ethiopian, African Union mediation needs to be unified – Sudan military council
  • Ethiopia’s army chief, 3 others killed in failed regional coup
  • Sudan court orders company to end military-ordered internet blackout – lawyer
  • Mauritania govt declares victory for ruling party candidate
  • Soccer – Nigeria players protest unpaid bonuses after World Cup elimination – ESPN
  • Ethiopia’s chief of army staff was killed in Addis Ababa by bodyguard – PM’s office
  • West African task force says troops killed 42 Islamic State fighters near Lake Chad
  • Ethiopian army general behind coup attempt in Amahara state – state TV
  • Ethiopia says coup attempt against leader of Amhara state failed
  • Sudan’s main opposition coalition says agreed to mediator draft agreement
  • 3 al Shabaab fighters killed in Kenya after attack on police
  • Egypt delegation to join Bahrain conference on Palestine economy
  • South Africa’s MultiChoice looks to lay off more than 2,000
  • World Bank lends Morocco $500 mln to expand early education
  • Malawi leader vows to lift economy as protests continue
  • Vodacom reaches deal with Congo over 2G licence
  • African Bank moves to stem client exodus, safeguard South African comeback
  • Algeria detains businessman in corruption investigation – radio
  • Africa Oil – Nigerian OSPs boost seller confidence
  • Ethiopia opposition see dangers if 2020 vote delayed
  • Morocco’s CPI rises 0.3% in May – planning agency
  • Orange sees Ethiopia’s telco liberalisation taking shape in 2020
  • Telecoms group Orange sees Africa/Middle East region growing around 5% in 2019
  • South Africa’s Vodacom to sell some operations in 5 African markets
  • Kenya shilling weakens, hurt by energy, manufacturing sector demand

N.B. Full stories of above headlines are available on Reuters

macroafricaintel Weekly | 24 Jun

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Click here for PDF version

Date Data / Event Period Forecast Previous
27 Jun South Africa PPI, % yy (mm) May 2019 6.7 (0.9) 6.5 (1.3)
28 Jun South Africa PSCE, % yy May 2019 8.2 8.0
28 Jun South Africa M3, % yy May 2019 8.6 8.8
28 Jun Kenya CPI, % yy (mm) Jun 2019 6.6 (0.1) 5.5 (-0.1)
Zambia CPI, % yy (mm) Jun 2019 8.6 (0.7) 8.1 (0.9)
Uganda CPI, % yy (mm) Jun 2019 3.8 (0.3) 3.3 (0.4)

#Africa #Markets | 21 Jun

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asian stocks slip amid persisting trade angst, political tensions
  • Focus shifts to trade, Middle East tensions after Fed euphoria
  • European stocks futures decline early trade
  • Gold advances to 6-yr high, crude dips after big surge
  • Dollar struggles, govt bonds buoyant post-Fed

Oil Markets

  • Oil rises towards $65 on fears of US attack on Iran
  • Oil extends gains after 5 pct rally on Thursday
  • Trump warned Iran via Oman of imminent attack – sources
  • Trump approved strike, then pulled back – NYT
  • Iran not keen on talks, warns of consequences – sources
  • Brent up 0.7% at $64.87 a barrel (0850GMT)
  • WTI up 0.4% at $57.28 a barrel

Precious metals

  • Gold scales near 6-yr peak on dovish Fed signals
  • Spot gold up 0.4% at $1,392.81 an ounce (0128GMT)
  • US gold futures up 0.1% at $1,398.10 an ounce

Grains

  • Corn prices extend gains as rains threaten US planting
  • Most active CBOT wheat futures up 0.2% at $5.27-3/4 per bushel (0106GMT)
  • Most active corn futures up 0.9% at $4.54 per bushel
  • Most active soy futures up 0.1% at $9.16-1/4 per bushel
  • Most active rice futures down 0.1% at $11.22 per hundredweight

Key African events or data releases today
[Posts & comments at my Twitter handle @DrRafiqRaji]

  • Kenya’s Kenyatta Rift Valley tour
  • Malawi presidential election tribunal ruling expected
  • US-Africa Business Summit in Maputo, Mozambique; 18-21 Jun
  • Afreximbank 2019 annual meetings in Moscow
  • South Africa state capture inquiry continues
  • 2019 Africa Public Service Day in Nairobi, Kenya; Kenyatta speech
  • Senegal’s Sall in Ivory Coast

Key African events or data releases yesterday & early a.m today
[Posted & commented on some headlines below at my Twitter handle @DrRafiqRaji]

  • South African rand falls after Ramaphosa speech seen lacking details
  • Vodacom unit to sell operations in 4 African markets
  • French car maker PSA opens $630 mln Morocco plant
  • South Africa’s Ramaphosa says Eskom too vital to fail
  • South African National Treasury hopes for swift approval of bill to speed up funds to Eskom
  • Africa Oil – Angolan trades in the window
  • Hundreds demonstrate for civilian rule in Sudan’s state capitals
  • Displaced families suffering subhuman conditions in Ethiopia – Egeland
  • US finds Nigeria, Niger improving anti-trafficking efforts
  • Zambia court rejects Vedanta bid to join liquidation case
  • Mercuria, South African firms place bids for South32’s SAEC coal mines
  • Lafarge Africa rises to 3-wk high after it sells South African unit
  • Heavy rains dampen Nigeria’s 2018/19 cocoa outlook
  • African Bank moves to stem client exodus, safeguard South African comeback
  • Kenya shilling weakness not linked to bank note plan – cbank
  • South Sudan lawmakers quit budget presentation over unpaid public salaries
  • Sudan’s military council dismisses public prosecutor, appoints replacement – sources
  • Zimbabwe’s currency hits new low, firms demanding payment in US dollars
  • Uganda shilling strengthens on inflows from offshore investors
  • Turkey’s Erdogan says he believes UN will look into death of Egypt’s Mursi
  • Kenya central bank governor says recent downward movement of shilling not an issue
  • Marketing division manager Kyari to head Nigerian state oil firm
  • Soccer – FIFA expected to take over the running of African football
  • Kenya slashes 2030 power production targets as usage still low – media
  • Nigeria’s Buhari appoints new head of state oil firm – NNPC statement
  • Angola oil struggles to sell on demand fears, weak margins

N.B. Full stories of above headlines are available on Reuters

macroafricaintel | Jobs, jobs, jobs (5)

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

I was the keynote speaker at an economic dialogue on Nigeria organised by Konrad Adenauer Stiftung (KAS) and the Delegation of German Industry and Commerce in Nigeria (AHK) on 23 May 2019. Titled “Road to Economic Development: Challenges and Opportunities”, the dialogue was aimed at shaping the priorities of the incoming second administration of President Muhammadu Buhari. The following is the final and fifth part of the highlights of my speech.

Take a charge on bank deposits to raise revenue
For the authorities, the most pressing matter is revenue. When there has been a boom in the economy, it was largely because crude oil prices were high. I doubt very much that it was crude oil itself that caused the boom, though. After all, oil is just about 10 percent of GDP. My reckoning is that a buoyant public purse and consequent free-spending government tend to inspire confidence all around. In other words, when the government is “happy”, it tends to be contagious. As oil prices are volatile, the weight of that purse varies with the times. Thus, there is a need for it to be reliant on more stable sources of revenue. In other words, we need the government to be “happy” most of the time.

Nigerians in formal employment are already taxed automatically. Those in the informal economy are not. And while even those Nigerians would not mind paying taxes, there is a lot that discourages them. Taxing consumption via value added tax (VAT) tends to be an effective way to bring as many people as possible into the tax net. At 5 percent, Nigeria’s VAT rate is relatively low. (Kenya’s is 16 percent.) So, the Nigerian government could certainly increase the VAT rate. Judging from the recent public reaction to a “testing of the waters” of sorts about such a move, however, it may not be ideal at this time.

There is another way. Nigerian banks currently charge all their customers, without exception, an account maintenance charge. And in spite of the complaints, they have by and large been able to get away with it. So, what stops a government, which has authority over the banks, and is probably more deserving of such a charge, from doing the same? In other words, the Central Bank of Nigeria could simply deduct a percentage of banks’ deposits (US$82 billion in 2018) as a “patriotic tax”; 5% should probably do the trick.

It would certainly be more efficient and palatable than increasing the VAT rate. The key thing here is that you are not going to be chasing anyone to get revenue. You simply tax the deposits of all Nigerians with a bank account the way banks already “tax” them via an account maintenance charge. When you add the US$4 billion from a potential 5 percent charge on bank deposits to about US$26 billion (2018) revenue the government already gets from oil, we could easily have a deficit-free budget this year and years to come.

Unify the exchange rate to attract investment
Growth is at an anaemic 2 percent. Such is the pessimistic outlook that an economy that not too long ago ran at a rate of more than 5 percent is now only expected up by about 2.5 percent in about three years or so. And considering that population growth is about 2.5 percent or more, this level of growth would still not be adequate to deal with the problems that we have. Most experts agree we would be able to accelerate the current tepid growth by attracting more investment; which is currently quite low at 13 percent of GDP. (Ethiopia’s is 38 percent of GDP.) A major impediment is our multiple exchange rate regime, however. Thus, a unified market-driven exchange rate would be ideal at this time.

Authorities on track; try harder
To be fair, the authorities are already doing some of these things (see earlier published parts 1-4 of the column). Still, we need to put pressure on them to do the following urgently. Raise power tariffs, raise VAT or take a direct charge on bank deposits, remove fuel subsidies, unify the exchange rate, list the state oil firm on the stock exchange. And for ongoing infrastructure projects, like rail and roads, a higher priority should be placed on those that connect key trade infrastructure; the Lagos sea port, for instance.

And considering there is increasing interest in Nigeria’s digitial economy by global tech firms, there should be a deliberate drive by the government to attract more tech foreign direct investment (FDI). Also, action should be afoot to build the relevant pipeline infrastructure that the soon-to-be-completed Dangote oil refinery would need to transport its output across the country. That way, it would not create another traffic gridlocked area in another part of Lagos, the commercial capital; where incidentally, another port is being built. These are simple and practical things that can be done now to improve our lives.

#Africa #Markets | 20 Jun

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Stocks rally, bond yields dive as Fed fuels easing hopes
  • US 10-yr yield below 2%, gold hits near 6-yr high
  • Markets price in 75 bp Fed rate cuts by year-end in total
  • BoJ stands pat, Fed stance seen prompting easing elsewhere
  • European stocks seen 0.5% higher

Oil Markets

  • Oil prices jump as downed US drone stokes Middle East tensions
  • Brent up 3.1% at $63.75 a barrel (0650GMT)
  • WTI up 3.2% at $55.49 a barrel

Precious metals

  • Gold sprints to over 5-yr peak after Fed hints at rate cuts
  • Silver hits nearly 3-mth high
  • Spot gold has gained over $80 so far this month
  • Gold in Australian dollar breaches A$2,000 mark for first time
  • Spot gold may gain more to $1,404 per ounce – technicals
  • Spot gold up 1.7% at $1,382.70 per ounce (0657GMT)
  • US gold futures up 2.8% at $1,386.30 an ounce

Grains

  • Soybeans extend losses, planting delays caps fall
  • Most active CBOT wheat futures down 0.6% at $5.19-1/4 per bushel (0037GMT)
  • Most active corn futures down 0.1% at $4.40-3/4 per bushel
  • Most active soy futures down 0.2% at $9.01-1/4 per bushel
  • Most active rice futures down 0.5% at $11.31 per hundredweight

Key African events or data releases today
[Posts & comments at my Twitter handle @DrRafiqRaji]

  • South Africa’s Ramaphosa State of the Nation Address
  • Kenya’s Kenyatta launch joint Mastercard Young Africa Works programme
  • World Refugee Day
  • Zimbabwe AfCFTA consultative forum in Harare; 19-20 Jun
  • ECOWAS military chiefs meet in Abuja
  • South Africa state capture inquiry continues
  • SWIFT African regional conference in Accra, Ghana; 18-20 Jun
  • US-Africa Business Summit in Mozambique; 18-21 Jun
  • Afreximbank 2019 annual meetings in Moscow

Key African events or data releases yesterday & early a.m today
[Posted & commented on some headlines below at my Twitter handle @DrRafiqRaji]

  • Angola oil struggles to sell on demand fears, weak margins
  • South African rand firms after dovish Fed, focus on Ramaphosa speech
  • Sierra Leone president opens bids for 7km airport bridge
  • Malawi president appoints economist Mwanamvekha as finance minister
  • UK’s CDC acquires 5% stake in Morocco’s BMCE Bank of Africa
  • Northeast Congo insecurity hampers response to measles outbreak
  • Kenya court convicts 3 for aiding deadly Islamist attack on university
  • Nigeria to consider its industries in Africa free trade zone decision
  • Namibia targets $1 bln worth of investments
  • EU wheat follows Chicago lower, market awaits Egypt results
  • Algeria presses corruption case against ex-PM and other senior figures
  • Sudan military council head says it’s ready to negotiate with opposition
  • Africa Oil – Outlook for Nigerian brightens, Angola sales still slow
  • Arab fund lends Morocco $237 mln dollars for infrastructure projects
  • Algeria security forces to be ‘strict’ with infiltration of protest marches – defense ministry
  • Virgin Money South Africa plans bank account, expansion for fintech app
  • Nigeria debt office says may tap eurobonds after all
  • Turkey to push for trial of Egypt govt over Mursi death
  • Nigeria plans to access foreign loans, eurobonds tap possible – DMO
  • African banks to fund construction of world’s biggest marine diamond mining vessel
  • Uganda shilling firms slightly as importer, banks’ appetite tails off
  • Congo declares measles epidemic after it kills more than ebola
  • Congo deploys army to protect China Moly’s copper mine from illegal miners
  • Algeria prosecutor refers ex-PM to supreme court over alleged corruption – statement
  • After 3 weeks stranded off Tunisia, migrant group to be repatriated
  • Kenya shilling firms, helped by flows from horticulture exports
  • South Africa consumer inflation subdued, upping rate cut chances
  • South Africa consumer inflation quickens to 4.5% in May

N.B. Full stories of above headlines are available on Reuters

#Africa #Markets | 19 Jun

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asia shares pin all on dovish Fed, risk disappointment
  • Asia shares ex-Japan enjoy best day since Jan
  • Much riding on Fed being open to easing, and soon
  • Global bonds rally after Draghi flags stimulus
  • Trump says to meet Xi at G20, trade talks to resume

Oil Markets

  • Oil gains amid US-China trade deal hopes, ECB talk of easing policy
  • Brent up 0.3% at $62.34 a barrel (0644GMT)
  • WTI up 0.4% at $54.10 a barrel

Precious metals

  • Gold inches lower as trade optimism, dovish ECB lift equities
  • Spot gold down 0.1% at $1,344.92 per ounce (0424GMT)
  • US gold futures down 0.2% at $1,348.40 an ounce

Grains

  • Soybeans fall, retreat from more than 3-mth high
  • Most active CBOT wheat futures down 0.8% at $5.27-1/2 per bushel (0124GMT)
  • Most active corn futures down 0.3% at $4.48-1/4 per bushel
  • Most active soy futures down 0.6% at $9.08-1/4 per bushel
  • Most active rice futures down 0.4% at $11.52 per hundredweight

Key African events or data releases today
[Posts & comments at my Twitter handle @DrRafiqRaji]

  • Zimbabwe AfCFTA consultative forum; 19-20 Jun
  • SWIFT African regional conference in Accra, Ghana; 18-20 Jun
  • US-Africa Business Summit in Maputo, Mozambique; Trump’s ‘Prosper Africa’ to be launched
  • South Africa inflation May-19 [fcst. 4.8% yy, prev. 4.4%]
  • South Africa state capture inquiry continues
  • South Africa PIC inquiry continues

Key African events or data releases yesterday & early a.m today
[Posted & commented on some headlines below at my Twitter handle @DrRafiqRaji]

  • South African rand retreats from 2-wk high, eyes on CPI and Fed
  • ‘Everything is stolen from us’: Tunisians fight to preserve cultural heritage
  • Scandal-hit Steinhoff posts narrow $1.3 bln loss in delayed 2018 results
  • Air strike hits warehouse co-owned by Italy’s ENI in Libya
  • Anadarko approves $20 bln LNG export project in Mozambique
  • Morocco’s Managem increases stake in Guinea’s Tri-K gold project to 85%
  • Survivors recall horror of Congo ethnic attacks
  • Gunmen kill 41 people in central Mali – mayor
  • Athletics – South Africa’s Semenya to chase fast 800m at Prefontaine Classic
  • Nigeria governor says armed robbers, not cash-eating gorilla, stole $22,000
  • Tunisia approves law excluding presidential candidate leading in polls
  • Wood Mackenzie says Anadarko to develop $20 bln Mozambique LNG project
  • New dresses, youth action: ending FGM in Africa
  • Internet blackout hits Ethiopia’s pocket, but not seen deterring telecoms investors
  • Lawmakers propose nationalising loss-making Kenya Airways
  • Uganda clears 3 experimental ebola treatments, watches for spread
  • Algeria army chief says “certain parties” seeking constitutional vaccum
  • Africa Oil – Angola buyers expect August discounts, Nigerian programmes awaited
  • Kenya parliament committee proposes nationalisation of Kenya Airways
  • South Africa rand rallies as Ramaphosa set to give more support for Eskom
  • Morocco central bank leaves benchmark rate at 2.25%
  • Uganda shilling firms as players trim positions
  • Nigeria has no plans to go to eurobond market this year
  • Uganda central bank holds key lending rate at 10%, sees faster GDP growth
  • Egypt plans bond denominated either in yuan or yen or South Korean won – official
  • More than 300k flee Congo violence, complicating ebola fight – UN
  • African survivors of FGM call for help with mental trauma
  • Kenya shilling seen under pressure from excess liquidity

N.B. Full stories of above headlines are available on Reuters

#Africa #Markets | 18 Jun

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asia stocks edge up cautiously as Fed jitters build, Europe seen lower
  • Asian markets edge up, European futures point to mixed open
  • Stocks kept in range before Fed’s 2-day policy meeting
  • Oil extends fall, growth woes outweigh Middle East concerns

Oil Markets

  • Oil prices fall for second day on economic growth worries
  • Oil markets have fallen around 20% since 2019 highs
  • But Middle East tensions supporting prices
  • Brent down 0.3% at $60.75 a barrel (0320GMT)
  • WTI down 0.3% at $51.76 a barrel

Precious metals

  • Gold holds steady ahead of Fed meeting
  • Spot gold steady at $1,340.51 an ounce (0126GMT)
  • US gold futures unchanged at $1,343 an ounce

Grains

  • Soybean prices climb nearly 1%, hit more than 3-mth high
  • Most active CBOT soybean futures up 0.7% at $9.19 a bushel (0045GMT)
  • Most active corn futures down 0.4% at $4.53 a bushel
  • Most active wheat futures down 1% at $5.34-1/2 a bushel

Key African events or data releases today
[Posts & comments at my Twitter handle @DrRafiqRaji]

  • US-Africa Business Summit in Maputo, Mozambique; 18-21 Jun [Trump’s “Prosper Africa” initiative to be launched]
  • South Africa state capture inquiry & PIC inquiry resume
  • ECOWAS finance ministers and cenbank chiefs meet on single currency in Abidjan, Ivory Coast
  • Uganda central bank MPC decision [fcst. 10.0%, prev. 10.0%]
  • Equatorial Guinea’s Obiang in Addis Ababa, Ethiopia as AU’s 2019 refugees & IDPs theme champion
  • South Africa’s Maimane press conference on state of DA-led governments
  • 5th annual meeting of the ID4Africa Movement in Johannesburg, South Africa; 18-20 Jun

Key African events or data releases yesterday & early a.m today
[Posted & commented on some headlines below at my Twitter handle @DrRafiqRaji]

  • Former Egypt president Mursi buried in Cairo, son says
  • Former Egypt president Mursi died from a heart attack – state TV
  • Egypt authorities refuse Mursi’s burial in family cemetery – son
  • Triple suicide attack kills at least 30 in northeast Nigeria
  • Amnesty International urges fair Egypt inquiry into Mursi’s death
  • Oil production at Libya’s Jalu field halted for maintenance – NOC
  • Muslim Brotherhood says Mursi death was “full-fledged murder”, calls for mass funeral in Egypt
  • Egypt prosecutor: Mursi collapsed in cage in court, no sign of injury
  • Algeria partner of Germany’s VW held over graft allegations – state TV
  • Africa Oil – Angola programme appears, some Nigerian sellers bullish
  • Zambia’s Mopani Copper Mines shuts down smelter
  • Ethiopia to split state telecoms provider into two before privatisation
  • Prince Harry backs mine clearance in Angola, following in Diana’s footsteps
  • Congo court upholds suspension of Vodacom’s 2G licence
  • Mozambique says 2 border police killed in shooting incident
  • Egypt’s Tourah Cement stops production due to oversupply
  • Chad opposition leader arrested in France on crime against humanity charges
  • At least 161 dead in northeast Congo in apparent ethnic clashes
  • Nigeria consumer inflation edges up to 11.4% in May – stats office
  • Kenya parliament will block repeal of rate cap, lawmaker says
  • Kenya shilling weakens on excess money market liquidity
  • Zimbabwe inflation soars to 10-yr high of 97.85% y/y in May
  • Airtel Africa expects London IPO to be priced between 80-100 pence share

N.B. Full stories of above headlines are available on Reuters