Africa Beat for the week ended 22 September 2017

By Alexander Forbes Investments on Sep 27, 2017 in Africa Beat

Economic Update

Botswana – Inflation remains unchanged in August

  • According to the Central Statistics Office, consumer price inflation (CPI) has been rising at the same rate of 0.1% m-o-m in July and August
  • On a yearly basis the inflation rate remained unchanged at 3.4% in August
  • The biggest contributor to inflation was the Transport sub-index which increased by 0.2% m-o-m in August

Kenya – Policy rates kept unchanged

  • The Central Bank of Kenya (CBK) has left policy rates unchanged at 10% and have remained at the same level since September 2016
  • According to the Monetary Policy Committee (MPC), inflation is expected to fall due to lower food prices, after inflation rose by 8% y-o-y in August
  • The MPC maintains a positive outlook as the foreign reserve position remains adequate to bear any short-term shocks
  • The CBK expects an improvement in GDP growth, which will be supported by a recovering agricultural sector, robust services sector and sound infrastructure development

Ghana – Credit ratings left unchanged

  • Fitch credit rating agency has left long-term foreign and local currency rating unchanged at “B”, with a stable outlook
  • The outlook was negative and was changed to stable in May 2017, which reflects positively on Ghana’s medium-term growth potential and improving macroeconomic stability
  • Although, a stable outlook has been maintained, the credit ratings are still constrained by low GDP per capita, high public sector debt and weak public finance

General News

West Africa – Demarcation of the maritime boundary

  • The ocean boundary dispute between Ghana and Ivory Coast has come to an end after the International Tribunal for the law of sea, set an ocean boundary line in favour of Ghana
  • The drawn-out dispute which has lasted for a decade, has slowed down production for both economies over the years
  • This decision is set to boost oil production levels in Ghana and stimulate economic growth, since the 2014 fiscal crisis
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Guinea – Bauxite mining back to normal after week of riots

  • Riots which disrupted operations in Bauxite mining companies, have come to an end after authorities were in negotiations for a week
  • Riots have broken out several times this year, mainly by protesting youth aimed at police and  transport systems over the lack of jobs
  • Guinea is the largest producer of Bauxite (primary ore of aluminium) and yet, remains one of the least developed countries in Africa
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Guinea Bissau – Rewards reaped as world goes nuts for cashews

  • The demand for cashew nuts has risen 31% globally over the past decade, as more people are seeking healthier alternatives
  • Farmers in Guinea Bissau have benefited from the increase in prices and demand, some have built houses from collected profits
  • The impoverished country is set to grow its GDP with 5.1% by the end of the year, mostly through the increasing prices and demand for cashews
  • According to the National Cashew Agency, cashew exports are expected increase to 200000 tons, an increase of 6% from 2016 and revenues for producers are expected to increase from ±US$ 50m last year to ±US$ 80m
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Nigeria – Court rules on terrorist group

  • The Attorney General has been granted permission by the Abuja High court, to designate the Indigenous People Of Biafra (Ibop) as a terrorist group
  • The decision came after Governors in 5 states officially banned the organisation
  • The Ibop leader Nnamdi Kanu, was arrested in October 2015 for treason, he was released in April 2017 and has since gone into hiding after his home was attacked

Ethiopia – Borderline dispute

  • A borderline dispute between Ethiopian and Somalian  communities have led to protests, claiming 32 lives and resulting in hundreds of people fleeing the area
  • The regional government on both sides have been pointing fingers at each other which resulted in the Federal government deploying the army to maintain calm
  • A state of emergency was declared in October 2016 and was lifted in August 2017 and protests soon broke out

Sources: NKC, Reuters, News24

Alexander Forbes Investments

Alexander Forbes Investments

Alexander Forbes Investments was established in 1997. We are a forward-thinking and trusted global investment provider, with roots in Africa. In pursuit of certainty we set out to understand our retail and institutional clients’ circumstances and risk tolerance to set clear goals. Our adaptive investment approach, called Living*Investing allows us to maximise opportunity and minimise risk at every stage of the investment cycle.

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