macroafricaintel Weekly | 18 Dec

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Click here for PDF version

Date Data / Event Period Forecast Previous
18 Dec Uganda Policy Rate, % 9.0 9.5
18 Dec Botswana Policy Rate, % 5.0 5.0
South Africa M3, % yy Nov 2017 6.0 5.0
South Africa PSCE, % yy Nov 2017 5.5 5.4
Nigeria CPI, % yy (mm) Nov 2017 15.8 (0.7) 15.9 (0.8)

*Uganda MPC view changed; now expect a rate cut.

macroafricaintel | South Africa: A race of three

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Just days to the elective conference of the ruling African National Congress (ANC) party on 16 December, Jacob Zuma, the South African president suffered a slight setback. That is an understatement, actually. A Pretoria High Court ruled he should implement the recommendations of the Public Protector (PP), the South African anti-corruption watchdog; who had asked him to set up an inquiry into what is now widely referred to as “State Capture.” In its simplest form, it means corruption. A wider interpretation would be to refer to it as the use of state resources by private elements for private gain with the active collaboration of public officials. Many revelations suggest President Zuma could be culpable of state capture. Naturally, Mr Zuma had wanted the court to tell him if the PP’s directives were binding on him. It was a time-wasting gimmick. And the court told him so punitively. Just before, he got some reprieve from the chief prosecutor, Shaun Abrahams – widely believed to be a Zuma loyalist – who gave him until the end of January next year to make representations as to why almost 800 previously dropped corruption charges should not now be instituted against him; after a court ruled sometime ago it was wrong to have dropped them in the first place. Incidentally, the judge who ruled the PP’s directives were binding on Mr Zuma also nullified his appointment of Mr Abrahams as chief prosecutor. Furthermore, the court ruled he could not appoint his replacement because he was clearly conflicted. That task it assigned to his deputy, Cyril Ramaphosa, the leading candidate to replace him as ANC president. Although Mr Zuma’s tenure as South Africa’s president would not expire until 2019, he could be recalled by the ANC if someone not favourably disposed to him wins the party’s presidency. With the only shield Mr Zuma would have thereafter being that offered by his position as president of The Republic, there is no gainsaying how highly motivated he must be to ensure that the person that emerges as the ANC president this weekend is someone that would protect him from what are clearly imminent troubles. Only one candidate can do this: former African Union Commission chairperson Nkosazana Dlamini-Zuma, his ex-wife. And even though ahead of the conference, Mr Ramaphosa is leading with nominations from the party branches, it is not definite. What matters more are the number of delegates he has in his pocket. And that is where Mr Zuma has an advantage. Oops! I meant Ms Dlamini-Zuma. Well, maybe I meant both of them. Mr Ramaphosa is nominally in battle with Ms Dlamini-Zuma but effectively at war with Mr Zuma.

Fight to finish
Despite being embattled, Mr Zuma still has the power to dish out patronage. Mr Ramaphosa is rich too. But Mr Zuma can offer much more than money. He can offer positions, contracts, and so on. It is not impossible that more cadres might decide it best to pitch their tents with the person that everyone seems to want to succeed Mr Zuma. Market participants want Mr Ramaphosa to win, at least. One actually estimated as much as US$10 billion in capital flight in the aftermath of an almost certain rating downgrade to junk status by Moody’s if Ms Dlamini-Zuma wins instead. Respected former finance minister Pravin Gordhan went as far as boasting that the economy could turn around in months if Mr Ramaphosa is elected. This is an exaggeration, of course. Mr Ramaphosa is no magician. (But it speaks to the enthusiasm around his candidacy.) The problems bedevilling South Africa would require very tough structural reforms. They tend to take time to bear fruit. And any president willing to embark on them would need to have not only strong political capital and will, but must also be willing to suffer the fate of probably not lasting long in office. Of all the candidates, Mr Ramaphosa is perhaps the only one that comes closest to being qualified to do the needed right things. Take labour reforms. It would be a very brave ANC president that takes on unions that form the bedrock of the party’s support base. COSATU, the umbrella labour union body, is a member of the tripartite alliance that ensures ANC is able to retain power. Were the ANC to lose their support because of what are germane but likely unpopular labour reforms, it may not be in power long enough to see them through. But if there is anyone with the skill and experience to do the task, it is Mr Ramaphosa. A former labour leader himself, Mr Ramaphosa is credited with helping former president and father of the nation, Nelson Mandela, with negotitations to end the apartheid regime. And it is widely known that when Mr Mandela was in a jam during what were very tasking talks, Mr Ramaphosa, when called upon, as he often was, was able to help make some headway. But Mr Ramaphosa is not without troubles of his own. He is tainted by the Marikana massacre, which resulted in the deaths of many protesting miners. And Mr Zuma has reportedly not relented in his efforts to ensure Mr Ramaphosa does not prevail. Lately, what came out was that Mr Zuma might be looking to invoke a state of emergency. Like always, his office came out vociferously with a denial. If past events are a barometer of Mr Zuma’s schemings, it is not totally out of the question that he is still contemplating this. Should Mr Ramaphosa win, Mr Zuma would need to move quickly to ensure the party is not able to recall him. Such is the risk of something unusual happening that market participants are already beginning to derisk themselves of South African exposure as a precaution. For the sake of dear South Africans, may the best candidate win.

#Africa #Markets | 15 Dec

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global markets

  • Asian shares edge up, on track for weekly gain
  • Wall Street slumps on concerns about US tax reform bill
  • Nikkei skids, as yen strengthens
  • US crude futures extend overnight gains

Oil markets

  • Oil stable on tighter market
  • Rising US output looms for 2018
  • OPEC-led supply cuts, Forties pipeline outage support crude
  • Rising US output, driven by shale, weighs on market

Precious metals

  • Gold steady amid subdued dollar, poised for weekly gain
  • Spot gold was nearly unchanged at $1,253.20 an ounce (0054GMT), after dipping 0.2 pct in the previous session
  • US gold futures edged down 0.1 pct at $1,255.70

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

  • Zimbabwe’s Mnangagwa to address ruling ZANU-PF party extraordinary congress today (15 Dec), to be endorsed as presidential candidate for 2018 elections
  • South Africa’s ANC elective conference starts tomorrow (16 Dec)

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

  • Morocco should step up structural reforms – IMF
  • Giant rats increase their attack on tuberculosis in Tanzania
  • South Africa’s PPC resigned to remaining single
  • World Bank invests $4.5 bln to arm cities against climate change
  • Coffee extends rebound from multi-month lows
  • South Africa’s Sibanye-Stillwater to be No.2 platinum miner with Lonmin buy
  • South Africa’s Steinhoff says Christo Wiese steps down as chairman
  • Kenya president’s election campaign used firm hired by Trump – privacy group
  • Lonmin labour union considers taking action to fight Sibanye takeover
  • Ivory Coast awards Tullow two new onshore oil blocks
  • Yields on Kenya’s 15-yr, 10-yr Treasury bonds up at latest sale – cenbank
  • Yields on Kenya’s 182-day and 364-day T-bills rise, 91-day T-bills at auction
  • Nigeria to release $1 bln from excess oil account to fight Boko Haram
  • Sudan’s oil supply threatened due to dollar shortage
  • Fitch places First Bank of Nigeria’s subordinated notes on rating watch positive on exposure draft
  • Tunisia ready for “decisive action” on economy, IMF says
  • Retention of jobs critical following Sibanye-Lonmin deal – mines minister
  • South Africa’s PPC not looking to sell assets or merge anymore – chairman
  • ECB willing to learn lessons from South Africa’s Steinhoff buys, says Draghi
  • Nigeria to issue $29 mln debut green bond next week
  • Zimbabwe’s Mnangagwa calls for end to Western sanctions
  • Standard Bank appoints Lungiza Fuzile as CEO of South Africa unit
  • Broke South Sudan hike fees, blocks aid despite appeal for cash
  • Sudan inflation drops to 24.76 pct in November
  • Cameroon’s Anglophones flee to Nigeria as crackdown grows
  • Saudi-backed military alliance to help G5 Sahel fight
  • Zambia sees 2017 copper output rising to 850,000 tonnes
  • Zimbabwe’s former finance minister faces new corruption charges
  • Angola Lourenco’s offers ultimatum for repatriation of funds
  • Kenya police assaulted and raped women during election – rights group
  • Nigeria repays $1.1 bln worth of T-bills; overnight rates fall
  • South Africa’s November producer inflation steady at 5.1 pct yr/yr
  • South Africa’s current account deficit narrows to 2.3 pct of GDP, FDI and trade surplus climb
  • Zimbabwe’s ex-leader Mugabe visits Singapore hospital – sources
  • Nambia economic recession deepens in third quarter, contracts 1.9 pct
  • Namibia inflation unchanged at 5.2 pct yr/yr in November
  • Egypt minister set to sign deal to resume Russia flights
  • South Africa’s Zuma appeals court ruling on state prosecutors’s appointment
  • Egypt’s agriculture ministry updates policy to end ergot confusion 

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

#Global #Markets | 15 Dec

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

1000GMT   Euro Area Trade balance (Oct-17) (est. €24.6B, prev. €26.4B)
1130GMT   India FX reserves (8 Dec) (prev. $401.9B)
1205GMT   India Trade balance (Nov-17) (est. $13.8B, prev. $-14.0B)
1330GMT   US NY Empire State manufacturing index (Dec-17) (est. 18.6, prev. 19.4)
1415GMT   US Industrial production (Nov-17) (est. 0.3% mm, prev. 0.9%)
1800GMT   US Baker Hughes oil rig count (Dec-17) (prev. 751)
2100GMT   US Net long-term Tic flows (Oct-17) (prev. $80.9B)
2100GMT   US Overall net capital flows (Oct-17) (prev. $-51.3B)
2100GMT   US Foreign bond investment (Oct-17) (est. $-4.3B, prev. $12.7B)

N.B
UK BoE Quarterly bulletin (1200GMT)
ECB Draghi speech during the day

#Africa #Markets | 14 Dec

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global markets

  • Asia stocks edge higher after Fed meeting
  • US dollar, yields sag
  • MSCI Asia-Pacific index up 0.45 pct
  • Fed hike rates but sounds caution over low inflation
  • China hikes interest rates, overall impact limited

Oil markets

  • Oil rises on lower US crude stocks
  • But growing output caps gains
  • US crude stocks down for 4th straight week
  • US production rises close to 10 mln bpd

Precious metals

  • Gold edges up as dollar holds steady
  • Spot gold was up 0.15 pct at $1,257.11 an ounce (0123GMT), after rising nearly 1 pct in the previous session
  • US gold futures were up nearly 1 pct at $1,260.60

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

  • 0800GMT   South Africa Current Account (Q3-17) (prev. -2.4% of GDP) [fcst: -2.5%]
  • 0930GMT   South Africa PPI (Nov-17) (est. 5.0% yy, prev. 5.0%) [fcst: 5.2%]

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

  • Steinhoff to restate 2016 financial results
  • US sanctions 2 Africans over ivory, weapons trade
  • Arabic coffee claws up from 7-session drop, NY cocoa rebounds
  • LafargeHolcim ends talks with South Africa’s PPC
  • Congo fighters jailed for life for child rape ceremonies – rights groups
  • 400,000 children risk starvation in volatile Congo as aid dries up
  • Zimbabwe orders illegal settlers to vacate farms
  • Investors concerned about Nigeria controls, but have not given up – IMF
  • Supporters of Egypt presidential hopeful arrested, say security sources, family
  • Nigeria NGOs slam civil society bill as grave threats to freedoms
  • Nigeria’s one-year T-bil yield rises more after Tuesday’s dive
  • Algeria’s ruling caste set on orderly succession, when the time comes
  • Burundi expects econ growth, spending to pick up in 2018
  • Zimbabweans wait to see whether Mnangagwa’s VPs will add new blood
  • Eni completes sale of 25 pct stake in Mozambique gas project to Exxon
  • In another blow to Zuma, South African top court orders influence-peddling inquiry
  • South African state fund wants a part in Steinhoff’s accounting scandal probe
  • Algeria’s Sonatrach plans closer ties with Total on energy projects
  • Tanzania’s Magufuli orders tighter FX controls, bank crackdown as growth slows
  • Zimbabwe seizes 200kg of ivory destined for Malaysia
  • Mauritius cenbank forecasts 2017 c/a deficit of 5.1 pct of GDP
  • Nigeria’s 1-year T-bill yield rises as foreign funds exit
  • Mozambique president replaces energy and foreign ministers
  • South African court upholds watchdog recommendation to set up inquiry on influence-peddling
  • South Africa’s retail sales rise 3.2 pct year/year in October
  • South Sudan needs $1.7 bln humanitarian aid in 2018
  • Botswana exchange lists IFC local currency bond
  • IMF urges Tanzania to reform and spend to stem economic slowdown
  • South Africa court orders Zuma to pay costs for challenging watchdog
  • South Africa’s CPI slows to 4.6 pct year/year in November
  • EU pushes to curb Africa migration more, still split on hosting refugees

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

#Global #Markets | 14 Dec

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

0030GMT   Australia Unemployment rate (Nov-17) (act. 5.4%, est. 5.4%, prev. 5.4%)
0030GMT   Australia Employment change (Nov-17) (act. 61.6K, est. 19.2K, prev. 7.8K)
0030GMT   Japan Nikkei manufacturing PMI (flash) (Dec-17) (act. 54.2, prev. 53.6)
0200GMT   China Industrial production (Nov-17) (act. 6.1% yy, est. 6.2%, prev. 6.2%)
0200GMT   China Retail sales (Nov-17) (act. 10.2% yy, est. 10.3%, prev. 10.0%)
0200GMT   China Fixed asset investment (YTD) (Nov-17) (act. 7.2% yy, est. 7.2%, prev. 7.3%)
0430GMT   Japan Industrial production (final) (Oct-17) (est. 5.9% yy, prev. 2.6%)
0630GMT   India WPI inflation (Nov-17) (prev. 3.6% yy)
0800GMT   South Africa Current account (Q3-17) (est. R-87.3B, prev. R-110B)
0830GMT   Germany Markit composite PMI (flash) (Dec-17) (est. 57.3, prev. 57.3)
0900GMT   Euro Area Markit composite PMI (flash) (Dec-17) (est. 57.2, prev. 57.5)
0930GMT   South Africa PPI (Nov-17) (est. 5.0% yy, prev. 5.0%) [fcst: 5.2%]
0930GMT   UK Retail sales (Nov-17) (est. 0.3% yy, prev. -0.3%)
1200GMT   UK BoE interest rate decision (est. 0.5%, prev. 0.5%)
1200GMT   UK BoE QE (est. £435B, prev. £435B)
1245GMT   Euro Area ECB interest rate decision (est. 0%, prev. 0%)
1245GMT   Euro Area ECB Deposit facility rate (est. -0.4%, prev. -0.4%)
1330GMT   US Retail sales (Nov-17) (est. 0.3% mm, prev. 0.2%)
1330GMT   US Initial jobless claims (9 Dec) (est. 240K, prev. 236K)
1445GMT   US Markit composite PMI (Dec-17) (prev. 54.5)
1500GMT   US Business inventories (Oct-17) (est. -0.1% mm, prev. 0%)

#Africa #Markets | 13 Dec

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global markets

  • Asian shares flat
  • Fed widely expected to hike interest rates
  • Investors await outcome of Alabama Senate election

Oil markets

  • Oil recovers on big U.S. crude stock drawdown
  • U.S. crude stocks fall by 7.4 mln bbls – API
  • U.S. gasoline, distillate stocks increase – API

Precious metals

  • Gold prices nearly flat ahead of Fed meeting outcome
  • Spot gold was steady at $1,243.10 an ounce (0051GMT), after marking its lowest since 20 July at $1,235.92 in the last session
  • U.S. gold futures were up 0.3 pct at $1,245.40

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

  • 0800GMT   South Africa Inflation rate (Nov-17) (est. 4.7% yy, prev. 4.8%) [fcst: 4.9%]
  • 0800GMT   South Africa Inflation rate (Nov-17) (est. 0.2% mm, prev. 0.3%) [fcst: 0.4%]
  • 1100GMT   South Africa Retail sales (Oct-17) (est. 5.2% yy, prev. 5.4%) [fcst: 5.3%]
  • Uganda interest rate decision (prev. 9.5%) [fcst: 9.5%]

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

  • France-based Miner AMR starts bauxite production in Guinea
  • Afreximbank pledges up to $1.5 billion to post-Mugabe Zimbabwe
  • Nigeria court drops most corruption charges against Senate president
  • Nigeria central bank injects $210 mln into currency market
  • EU pushes to curb Africa migration more, still split on hosting refugees
  • Guinea allowed $650 mln in non-concessional loans under IMF programme
  • Liberia to hold run-off vote on Dec. 26
  • Amnesty says EU is complicit in violations of migrant rights in Libya
  • South Africa’s Transnet hires banks for US dollar bond
  • Moody’s says challenging operating conditions keeps 2018 outlook for Africa banks negative
  • Namibia’s economic growth seen contracting in 2017 – IMF
  • South Africa’s Zuma rejects reports his office is drafting emergency laws
  • Zimbabwe voters need more time to register after turmoil – parties
  • South Africa’s nearly man Ramaphosa may lead country at last
  • “Fierce and formidable” Dlamini-Zuma eyes South Africa’s presidency
  • Tight race as South Africa’s ANC prepares to elect Zuma successor
  • One Planet summit turns to private sector for climate action
  • Major Nigeria oil union to meet government before planned strikes
  • Namibia’s economic growth seen at 4 pct in 2019/20 financial year – IMF
  • Mauritius central bank names Googoolye new governor
  • IMF says Sudan must float currency to boost growth, investment
  • South Africa’s revenue agency concerned about falling tax compliance
  • Libya’s Nafusa Oil operations hoping to pump 10,000 bpd in Ghadames basin
  • Nigeria plans to repay $647 mln T.bills, yields drop
  • Unfazed by OPEC, Libya and Nigeria seek to boost oil output
  • South Africa’s October manufacturing output up 2.2 pct y/y
  • Cholera resurges in Zambia capital Lusaka, WHO says
  • Botswana’s 2017/18 budget in surplus at half-year mark
  • Yields mixed in weekly South Africa government bond auction
  • South Africa’s trade department, company regulator to probe Steinhoff
  • Zimbabwe’s Mugabe flies to Singapore, first trip since ouster

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