macroafricaintel Daily Brief | 7 Apr

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji, @macroafrica

Global Markets

  • Asian shares cautiously gain on virus hopes, dollar slips
  • Early signs of virus peaking in Europe, New York
  • Broad gains from Tokyo to Sydney but momentum ebbs
  • Currencies, bonds steady as economic risks weighed

Oil Markets

  • Oil gains as hopes rise for production cut amid coronavirus outbreak
  • Brent up 2.2% at $33.78 a barrel (0026GMT)
  • WTI up 3.7% at $27.05

Precious metals

  • Gold slips from 4-wk high as dollar, equities firm on coronavirus slowdown
  • Spot gold down 0.2% at $1,657.67/oz. (0110GMT)
  • US gold futures up 1.7% at $1,723

Grains

  • Corn heads higher after dropping for seven straight sessions
  • Corn up 0.6% at $3.29-3/4 a bushel (0226GMT)
  • Soybean up 0.6% at $8.61
  • Wheat down 0.6% at $5.51-1/4

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

  • Kenya locks down Nairobi (6 Apr) & Kilifi, Mombasa & Kwale (8 Apr)
  • South Africa Eskom global investor update call
  • South Africa FX reserves Mar-20 [prev. $54.7B]
  • Key African countries on lockdown; subdued economic activity
  • Covid-19 updates by authorities across the continent

Key African events or data releases yesterday & early a.m today

  • Trump says OPEC has not asked him for a US oil production cut
  • Morocco makes face masks compulsory due to coronavirus
  • OPEC+ likely to agree to cut production if US joins effort – sources
  • Egypt reports 149 new coronavirus cases, its highest daily toll
  • Morocco looks to foreign debt to deal with coronavirus impact
  • South Africa central bank asks lenders to scrap dividends amid virus
  • South Africa should not approach IMF for help, ANC and allies say
  • “We are at war”: Kenya halts movement to areas worst hit by coronavirus
  • Zimbabwe eases coronavirus lockdown to allow diaspora remittances flow
  • South Africa central bank announces regulatory relief for banks
  • Gunmen kill 25 soldiers in north Mali attack – army spokesman
  • Africa Oil – Sonangol sells Cabinda, Girassol cargoes
  • South Africa Eskom plans global investor update call – lead manager
  • South Africa rand firmer as risk takers return, stocks up 3.29%
  • Nigeria seeks $6.9 bln from lenders to fund coronavirus fight
  • Norway considers attending OPEC meeting on April 9 – oil ministry
  • South Africa sets aside $64 mln for small-scale farmers amid lockdown
  • South Africa central bank sees up to -4% GDP over coronavirus fallout
  • Ivory Coast police clash with protesters over coronavirus test centre
  • Uganda slashes main interest rate to 8% as coronavirus hurts economy
  • KFC owner witholds rent on South Africa stores amid lockdown – Bloomberg
  • Kenya president halts movement in areas affected by the coronavirus
  • Kenya – Safaricom, Vodacom finalise M-Pesa acquisition from UK’s Vodafone
  • South Africa makes more spectrum available to meet internet demand
  • Kenya shilling weakens as players beef up positions
  • Congo mine attack kills three Chinese nationals – Xinhua
  • South Africa Woolworths warns of likely 20% profit fall
  • Saudi Arabia delays setting May prices, looks to OPEC meeting to settle price war

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

macroafricaintel Daily Brief | 6 Apr

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji, @macroafrica

Global Markets

  • Oil slips on oversupply fears, but stocks jump on virus slowdown hopes
  • Oil prices fall after Russia-Saudi Arabia delay meeting
  • British pound skids as PM Johnson admitted in hospital
  • Equity investors focus on slowdown in COVID-19 deaths

Oil Markets

  • Oil drops over $1 on oversupply after OPEC+ delays meeting
  • Brent down 3.8% at $32.82 a barrel (0203GMT)
  • WTI down 5.9% at $26.68

Precious metals

  • Gold firms on safe-haven demand, but stronger dollar caps gains
  • Spot gold up 0.2% at $1,619.03/oz. (0314GMT)
  • US gold futures steady at $1,645.90/oz.

Grains

  • Corn falls to 3-1/2-year low on bleak prospects for ethanol
  • Corn futures down 0.5% at $3.29-1/4 a bushel
  • Wheat up 1.2% at $5.55-3/4 a bushel
  • Soybeans down 0.3% at $8.51-3/4 a bushel

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

  • Nigerian finance minister Ahmed briefs on Covid-19 stimulus plan
  • Bank of Uganda decides on interest rates [fcst. 8.0%, prev. 9.0%]
  • Key African countries on lockdown; subdued economic activity
  • Covid-19 updates by authorities across the continent

Key African events or data releases over the weekend & early a.m today

  • Tripoli forces hit eastern Libya cargo plane near capital
  • Libya revolution premier Jibril dies from coronavirus
  • Africa could lose 20 mln jobs due to pandemic – AU study
  • Egypt sees growth slowing to 4.5% in Q3, 1% in Q4 due to coronavirus
  • Congo’s Chemaf mothballs copper-cobalt processing plant over coronavirus
  • Ethiopia reports its first death of a COVID-19 patient
  • South Africa arms firm Denel to produce ventilators in coronavirus fight
  • South Sudan confirms first case of coronavirus
  • Morocco to release 5,654 prisoners amid coronavirus outbreak
  • Egypt non-oil private sector contracts faster as virus hits – PMI
  • OPEC+ meeting delayed as Saudi Arabia & Russia row over oil price collapse – sources
  • Algeria extends curfew as coronavirus cases rise
  • Malawi’s president and ministers to take 10% salary cut to fight coronavirus
  • Coronavirus hits Egypt’s administrative capital and grand museum
  • Algeria to speed up customs procedures for food, health equipment over coronavirus
  • Tunisia govt given special powers to handle coronavirus crisis
  • Nigeria to set up $1.39 bln fund to fight coronavirus
  • BAT South Africa urges govt to lift cigarette sale ban
  • Egypt postpones launch of mega projects to 2021 due to coronavirus – presidency
  • Senegal GDP growth to shrink to less than 3% due to coronavirus – president
  • Zambia central bank establishes medium-term facility to ease liquidity crunch
  • African migrants in Morocco wait for aid as coronavirus bites
  • WHO opens door to broader use of face masks to limit spread of coronavirus
  • Coronavirus spotlights risks of swelling slums in Africa’s cities
  • Guinea-Bissau convicts 12 for smuggling record 1.8 tonnes of cocaine
  • Fitch downgrades South Africa further into ‘junk’
  • Brent crude jumps above $33 on hopes of oil output deal
  • Africa Oil – Oversupply keeps offers at steep discount
  • ArcelorMittal South Africa issues force majeure, cuts salaries
  • Best-selling novel exposes life of child slaves in Nigeria
  • Zimbabwe turns water cannon on coronavirus
  • Deep OPEC+ cuts won’t be enough to prevent oil inventory build – IEA head
  • Nigerians turn to rabbits for consolation during coronavirus lockdown
  • Kenya shilling seen under pressure as economy reels from virus
  • Ivory Coast pledges $500 mln to support commodities sectors
  • South Africa, Turkey CDS surge to highest since financial crisis
  • South Africa Transnet to resume transport of non-essential cargo during lockdown
  • East Africa locust swarms gather as coronavirus curbs delay pesticides
  • Uganda shilling holds steady against the dollar
  • Kidnapped Mali opposition staff freed but leader still missing
  • Medical aid marooned as Africa shuts borders amid coronavirus pandemic
  • OPEC+ producers debating possible oil cuts of 10 mln bpd – OPEC source
  • Kenya private sector activity plunges in March – PMI
  • South Africa private sector activity falls to record low in March – PMI
  • Rwanda secures $109 mln IMF loan to tackle coronavirus

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

macroafricaintel Weekly | 6 Apr

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji, @macroafrica

Click here for PDF version

Date Data / Event Period Forecast Previous
6 Apr Uganda Interest Rate, % 8.0 9.0
Seychelles CPI, % yy (mm) Mar 2020 1.3 (0.5) 0.8 (-0.1)
Botswana CPI, % yy (mm) Mar 2020 2.7 (0.6) 2.2 (0.1)
Tanzania CPI, % yy (mm) Mar 2020 4.1 (1.7) 3.7 (1.1)
Namibia CPI, % yy (mm) Mar 2020 3.1 (0.8) 2.5 (0.3)
Nigeria CPI, % yy (mm) Mar 2020 13.2 (1.7) 12.2 (0.8)
South Africa CPI, % yy (mm) Mar 2020 6.3 (2.4) 4.6 (1.0)
Ethiopia CPI, % yy (mm) Mar 2020 22.4 (2.7) 21.8 (2.9)
Mauritius CPI, % yy (mm) Mar 2020 3.1 (0.8) 2.5 (0.3)

macroafricaintel | The power of narratives

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji, macroafrica

In his 2019 book “Narrative Economics: How stories go viral & drive major economic events”, Nobel laureate Robert Shiller highlights the two elements of what he means by narrative economics viz. “(1) the word-of-mouth contagion of ideas in the form of stories and (2) the efforts that people make to generate new contagious stories or to make stories more contagious.”

Put another way, narrative economics is the study of “how narrative contagion affects economic events.” Public beliefs affect major economic events. Economists are however reluctant to incorporate narratives in their studies because they are difficult to measure, sources can be hard to trace robustly, and so on. Shiller’s argument is that “economists can best advance their science by developing and incorporating into it the art of narrative economics.”

“Narrative economics, the study of the viral spread of popular narratives that affect economic behaviour, can improve our ability to anticipate and prepare for economic events”, he asserts.” This makes sense. Most would agree that “contagious popular stories that spread through word of mouth, the news media, and social media,” increasingly drive the economy.

“An economic narrative is a contagious story that has the potential to change how people make economic decisions” like hiring a worker, launching a business venture, or investing in a “volatile speculative asset.” Sport events have been found to affect the economic confidence of the locales or countries where they are being held, for instance. Similarly, it has been found that “shark attacks at local beaches can affect votes for local incumbents, and background music in advertisements can have a strong effect on consumers.”

There is much that we can relate with from this background by Shiller, especially in light of the deluge of information – most of which are predominantly false and increasingly hard to detect as such – we are constantly being bombarded with in regard of the ravaging and ongoing Covid-19 pandemic.

Boring truths, fantastic lies
Truth is boring. As human beings, we are more easily drawn to magical stories; even when we know they are false. It is one of the reason why even when a retraction or correction of a false publication is made, it tends not to have as much resonance as the lie it seeks to refute. The costs of false popular narratives on lives and livelihoods are real and lasting.

What you choose to do about them depends on your station and the costs to you, however. If you are a celebrity, any popular narrative, whether negative or positive, can be economically rewarding. If you are a politician or a government, false narratives matter a great deal. And thus, you must do your utmost to change them to your truth; albeit you never quite succeed in doing so entirely.

As an individual, the knowledge about the potency of narratives might make you a little bit more relaxed. Because just like we are wired to connect with stories, we also desire new ones. Thus, every narrative is necessarily the casualty of time.

Take the case of the recent and still ongoing bizarre narrative about fifth generation mobile networks (5G) being the cause of Covid-19. There have been a number of fires at cellphone towers in the United Kingdom on the back of this popular view already. Such is the potency of the narrative that the Nigerian ministry of communications was forced to issue a press statement insisting it had not issued a 5G licence to any firm as feared by some after the narrative went “viral”.

But surely, when the circumstances and our infrastructural needs require 5G, there should not be any hesitation in doing so. Still, it is abundantly clear that in that event, a great deal of effort would be required to convince people it poses no real danger to their lives.

Beware of the dominant narrative
David Katz, founding director of the Yale-Griffin Prevention Research Centre in America, has been suffering a great deal of grief lately. To my mind, it is not justified. He is being criticized for daring to suggest another way to manage the Covid-19 pandemic; with less of the increasingly mounting economic costs of the current consensus containment measure of lockdowns.

The goal here is not to prove that he has a point or not; albeit considering how poor countries are probably ill-advisedly copying their rich counterparts without properly considering their own unique limitations, some of his suggestions resonate with me somewhat. Instead, what one seeks is to point out the importance of not being unduly swayed by the consensus or dominant narrative.

What Katz suggests is a middle course of sorts; a balancing of the health and economic costs of the measures to contain the pandemic. It does not matter whether he is right or wrong. The key point is that there is a danger that a narrative dominates at the expense of other potentially good or better ideas. We must keep questioning our decisions and ideas, reviewing them when there is new information, and if need be, changing them if the benefits of doing so outweigh the costs.

Take the case of the media coverage of the Covid-19 pandemic. If you ask a random person anywhere in the world today about the number of cases in his or her locale or country, he or she would probably quite easily tell you what the figure is. Try asking about the number of recoveries, I would be hugely surprised if the individual is able to say it without some thought. Actually, I could not readily tell you what the figure is myself; that is, even as I make a deliberate effort to track the number of recoveries.

Yes, transparency is crucial. But if anyone wants the data, they could go to a well-advertised portal for the information. What government officials and the media should focus more on should be recoveries. As human beings are wired for sensational stories, a fact the media is well aware of, it would take a deliberate effort to focus on more positive stories. Still, the authorities could definitely make the change.

macroafricaintel Daily Brief | 3 Apr

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji, @macroafrica

Global Markets

  • Oil, shares slip on doubts over Saudi-Russia deal
  • US oil futures drop 4.5% on doubts on output cut deal
  • Trump says has not offered US output cut
  • S&P 500 futures fall 0.7% after energy driven overnight gain

Oil Markets

  • Oil falls on scepticism over Trump’s Saudi-Russia output deal
  • Brent down 3.3% at $28.96 a barrel (0335GMT)
  • WTI down 4.5% at $24.19

Precious metals

  • Gold slips on firm dollar, poor US data limits losses
  • Spot gold down 0.1% at $1,610.64/oz. (0037GMT)
  • US gold futures down 0.1% at $1,635.50/oz.

Grains

  • Wheat set for biggest weekly drop since late February on economic woes
  • Wheat down 4% week thus far
  • Corn down 3% for the week already
  • Soybeans down 2.4% w/w

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

  • Bank of Uganda decides on interest rates [fcst. 8.0%, prev. 9.0%]
  • South Africa Standard Bank PMI Mar-20 [prev. 48.4]
  • Nigeria Stanbic IBTC PMI Mar-20 [prev. 55.0]
  • PMIs for Kenya, Ghana & other African countries due as well
  • Key African countries on lockdown; subdued economic activity
  • Covid-19 updates by authorities across the continent

Key African events or data releases yesterday & early a.m today

  • Tunisia may impose exceptional taxes on firms to raise coronavirus funds – premier
  • Trump touts ‘great Saudi-Russia oil deal to halt price rout, but details unclear
  • Egypt reports 86 new coronavirus cases
  • World Bank approves initial $1.9 bln in emergency coronavirus funds
  • UN agency keeps Africa food aid flowing amid coronavirus
  • Africa Oil – Glut persists, weighing on differentials
  • Egypt central bank leaves rates unchanged
  • Egypt to increase strategic staple reserves to 6 months
  • Malawi records first three cases of coronavirus
  • Iraq supports calls for emergency OPEC+ meeting [Most members already indicated support as well]
  • South Africa rand hits new look on bleak economic outlook
  • Ethiopia signs $800 mln geothermal power purchase agreement
  • South Africa ARM says JV gets green light to load iron ore amid lockdown
  • South Africa Famous Brands pulls plug on Gourmet Burger Kitchen
  • No meeting set up for OPEC+, sources say after Saudi call for talks
  • South Africa’s Libstar to postpone final dividend due to coronavirus
  • French army reports four soldiers positive for coronavirus in West Africa
  • Coronavirus leaves Senegal’s street children more exposed than ever
  • Africa FX – African currencies seen under pressure from the dollar; in week ahead
  • OPEC’s daily basket oil price slides below $17 a barrel
  • Middle East, Africa governments need to act faster to protect airlines – IATA
  • Twitter removes accounts linked to Egypt, Saudi Arabia, other countries
  • From chatbots to online markets, Africans craft weapons against coronavirus
  • Morocco’s February trade deficit deepens 2%
  • Zambia records coronavirus death
  • Ethiopia opens up mobile money services to local non-financial firms
  • Wives rejoice and traders despair as coronavirus halts khat supply to Somalia
  • Kenya shilling weakens against the dollar
  • Africa govts team up with tech giants to fight coronavirus lies
  • Tightening liquidity helps to support Uganda shilling
  • Nigeria tells oil, gas companies to cut staff in pandemic fight
  • South Africa’s Quantum Foods warns of 38% drop in first-half profit
  • Senegal seeks $221 mln from IMF to mitigate coronavirus shock
  • Kenya’s push to harvest rainwater has a new payoff: battling coronavirus

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

macroafricaintel Daily Brief | 2 Apr

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji, @macroafrica

Global Markets

  • Asian stocks slip as Trump warns of horrors to come
  • Trump warns of ‘horrific’ days ahead
  • Asian stocks slip, bonds rally, dollar firms
  • US jobless claims due at 1230 GMT, seen hitting fresh record

Oil Markets

  • Oil surges as Trump talks up hopes for truce in Saudi-Russia price war
  • Brent up 4% at $25.74 a barrel (0118GMT)
  • WTI up 3.7% at $21.06

Precious metals

  • Gold slips as dollar holds firm; US jobs data awaited
  • Spot gold down 0.4% at $1,584.50/oz. (0312GMT)
  • US gold futures up 0.4% at $1,597.20/oz.

Grains

  • Soybeans ease for 2nd session as coronavirus fears hit markets
  • Soybeans down 0.4% at $8.59-3/4 a bushel (0058GMT)
  • Wheat up 0.2% at $5.51-1/2 a bushel
  • Corn up 0.3% at $3.35-3/4 a bushel

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

  • Key African countries on lockdown; subdued economic activity
  • Covid-19 updates by health authorities across the continent

Key African events or data releases yesterday & early a.m today

  • Egypt’s health sector races to scale up coronavirus readiness
  • IMF has strong resources to deal with virus crisis, working to identify more – officials
  • South Africa needs ‘hundreds of thousands’ of virus tests – health minister
  • Africa seeks IMF, World Bank, EU backing on debt relief
  • Fidelity Bank cuts profit target as coronavirus hits Nigeria
  • Africa Oil – Sell tender awarded, Angolan diffs deeply negative
  • South Africa’s Eskom sends force majeure notices to wind farms
  • Tunisia banks to defer loan payments, suspend dividend distribution
  • Rand roiled by rising South Africa growth fears
  • Nigeria’s Fidelity Bank prepares eurobond coupon before due date – executive
  • South Africa insurer Discovery, Vodacom set up online virus consultation service
  • South Africa’s 2019/20 tax revenue at 1.4 trillion rand, short of target
  • Nigeria banks limit debit card withdrawals abroad
  • Somali doctor, veteran of many battles, girds for war with coronavirus
  • World Bank approves delayed $500 million education loan to Tanzania
  • South Africa says ports remain open despite lockdown
  • Coronavirus seen as trigger for mobile money growth in West Africa
  • Nigeria stocks hit new 8-yr low as coronavirus lockdown enters day two
  • Uganda doctors say anti-coronavirus measures could cause deaths
  • Uganda shilling holds steady due to reduced market activity
  • South Africa’s Eskom could buy less power from wind farms during lockdown
  • Kenya shilling under pressure from the dollar
  • Fitch, Moody’s downgrade South Africa banks to junk
  • Africa wants IMF, World Bank & EU support on debt relief – UNECA
  • South Africa Absa PMI contracts for 14th straight month
  • Glencore’s chrome joint venture in South Africa with Merafe declares force majeure
  • Ethiopia postpones August election due to coronavirus
  • US air strike killed civilians in Somalia, Amnesty International says
  • South Africa should seek IMF funding to deal with pandemic – IIF

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

macroafricaintel Daily Brief | 1 Apr

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji, @macroafrica

Global Markets

  • Asian shares hold on to gains but virus keeps on markets on edge
  • Pandemic threatens sharp global slowdown
  • Dollar braces for US manufacturing data
  • Oil market in confusion over supply glut

Oil Markets

  • Oil prices fall as US inventory build-up heightens oversupply concerns
  • Brent down 1.8% at $25.88 a barrel (0345GMT)
  • WTI up 0.6% at $20.6

Precious metals

  • Gold recovers from 3% slump as dollar, Asian equities ease
  • Spot gold up 0.4% at $1,577.83/oz. (0030GMT)
  • US gold futures down 0.3% at $1,591.30/oz.

Grains

  • Corn rebounds from 2-wk low, USDA forecast caps gains
  • Corn up 0.2% at $3.41-1/2 a bushel (0126GMT)
  • Soybean down 0.2% at $8.84-1/2 a bushel
  • Wheat up 0.5% at $5.71-1/2 a bushel

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

  • Key African countries on lockdown; subdued economic activity
  • South Africa ABSA manufacturing PMI Mar-20 [prev. 44.3]
  • Kenya parliament special session on Kenyatta covid-19 stimulus plan

Key African events or data releases yesterday & early a.m today

  • South Africa should seek IMF funding to deal with pandemic – IIF
  • Paris Club creditors agree to cancel $1.4 bln of Somali debt
  • Somalia to finalize debt forgiveness in bilateral talks – minister
  • Egypt’s private airlines call for aviation minister to intervene amid coronavirus crisis
  • Algeria leader urges discipline, says govt able to counter coronavirus
  • Ethiopia postpones August election due to coronavirus
  • MTN moves ahead on Nigeria stake sale with markets in turmoul – Bloomberg
  • Tunisia extends lockdown by two weeks
  • East Africa nation of Burundi confirms first coronavirus cases – Health ministry
  • South Africa sends testing teams into townships to contain coronavirus
  • Zambia bonds dive as govt calls in debt restructuring advisers
  • Botswana records first death from coronavirus – vice president
  • Africa Oil – Nigeria April cargoes weigh on market
  • Ghana slashes GDP forecast over coronavirus shock
  • Zimbabwe court rules Chamisa not legitimate leader of opposition
  • South Africa rand firms after trade data, stocks rise
  • OPEC rift widens as group fails to set date for emergency talks
  • Tunisia releases 1,420 prisoners over coronavirus
  • Kenya Airways seeks financial help from the govt
  • Egypt M2 money supply up 13.96% y/y in February – c.bank
  • Ivory Coast suspends Cargill, Barry Callebaut from buying new cocoa beans
  • Katanga Mining witholds $250 mln Gecamines payment, delays Congo acid plant
  • Africa’s biggest city Lagos locks down to defend against coronavirus
  • South Africa lockdown squeezes global chrome supply
  • South Africa’s trade balance swings to surplus in February
  • Sierra Leone has confirmed its first case of coronavirus, president says
  • Kenya shilling edges down against dollar
  • Kenya year-on-year inflation falls 6.06% in March
  • Uganda shilling holds steady against the dollar
  • Coronavirus comes to rescue of Sierra Leone plundered rosewood
  • Samancor Chrome issues force majeure due to South Africa lockdown
  • France to seek debt moratorium for the most fragile countries
  • South Africa Sanlam appoints new CEO, to take over by July
  • South Africa Standard Bank withdraws guidance over coronavirus
  • South Africa’s Harmony Gold sees lower output during 21-day lockdown
  • Tanzania confirms its first coronavirus death, health minister says
  • South Africa Sasol flags refinery slowdowns

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