Market Commentary
Oil prices slipped by 1% on Tuesday, erasing most of Monday’s gains, as mixed economic data from the world’s second largest oil consumer China and winter demand worries offset the impact of Saudi Arabia and Russia extending output cuts. Brent crude futures slipped 92 cents, or 1.08%, to $84.26 a barrel by 0714 GMT, recovering slightly after a $1 drop earlier, while U.S. West Texas Intermediate crude was at $79.95 a barrel, down 87 cents, or 1.08%.
KENYA: Uganda Shifts Oil Imports, Posing Financial Challenges for Kenya
Uganda is set to alter its oil import strategy, moving away from relying on the Northern Corridor, which could result in Kenya losing approximately Sh15 billion. Starting January 1, 2024, Uganda will import oil directly from Vitol Bahrain through Uganda National Oil Company (UNOC), mimicking Kenya’s government-to-government approach. UNOC will become the exclusive petroleum importer, supplying private oil marketing companies. This shift aims to streamline the supply chain and improve economic ties between the two nations, but it may come at a significant cost to Kenya.
NIGERIA: Naira Plummets to 1,030/$ Despite Recent Gains
The Nigerian naira saw a significant drop on Monday, falling to an average of 1,030 per US dollar in the parallel market, marking an 8.42% decrease from the previous week’s closing rate of N950. This decline comes after the Central Bank of Nigeria started clearing its FX backlog, which had temporarily boosted the naira. The currency is now trading between N990 and N1,030 per dollar, leaving traders concerned about its stability.
GHANA: Ghana Finance Minister Aims to Revitalize Tax System for Increased Revenue
Ghana’s Finance Minister, Ken Ofori Atta, is leading efforts to improve the nation’s tax system to boost revenue. He addressed the challenges faced by companies, emphasizing the importance of enhancing tax administration. His remarks came during a visit to SOL Cement, closed by the Ghana Revenue Authority (GRA) due to GH¢700 million in tax defaults.
EGYPT: Egypt’s International Reserves Inch Up to $35.1 Billion
The Central Bank of Egypt (CBE) reported a modest increase in international reserves, reaching $35.1 billion in October, up from $34.97 billion in September. This total includes $8.1 billion in gold, $26.63 billion in foreign currency, and $371 million in special drawing rights (SDRs) provided by the IMF. Egypt has been boosting its foreign currency reserves through bond issuances and securing a loan from China Development Bank.
TUNISIA: World Bank Forecasts Slower GDP Growth for Tunisia in 2023
The World Bank predicts that Tunisia’s GDP will grow by 1.2 percent in 2023, representing a notable deceleration from the growth experienced in 2021-2022. It is expected to see a slight uptick to 3.0 percent in 2024. However, the growth outlook for 2024 carries significant downside risks tied to drought conditions, progress in structural reforms, and financing challenges. The report anticipates that Tunisia’s twin deficits will improve, thanks to favourable commodity prices and fiscal restraint, but addressing these deficits will necessitate substantial external financing due to heavy debt repayments