SSA Market Commentary
Oil prices extended losses on Wednesday in Asian trade, after falling by more than 3% to six-month lows in the previous session on oversupply and demand concerns. Brent crude futures for February fell 33 cents, or 0.45%, to $72.91 a barrel by 0621 GMT. U.S. West Texas Intermediate crude futures for January dropped 29 cents, or 0.42%, to $68.32 a barrel.
KENYA: Kenya’s President Ruto Touts Economic Resilience Amidst $69 Billion Debt
President William Ruto asserts Kenya’s successful avoidance of debt distress risks, citing a robust 5.4% GDP growth in the last six months. Celebrating the 60th Republic Day, Ruto defends the nation’s economic resilience despite a substantial $69 billion public debt. He acknowledges tough decisions, including increased taxes and infrastructure delays, to avert a debt catastrophe. With inflation down to 6.8%, Ruto pledges to accelerate economic progress. Despite earlier concerns, Kenya eases investor worries through an IMF program and explores options, including concessional financing, to address the $2 billion Eurobond maturity in 2024.
NIGERIA: Budget Threat as Nigeria’s Bonny Light Oil Drops Below $76.53 per Barrel
Nigeria faces a budgetary challenge as Bonny Light oil prices plummet to $76.53 per barrel, down from the budgeted $77.96, amid legislative scrutiny of the 2024 federal budget at the National Assembly. The decline raises concerns about funding, compounded by a 7.4% drop in oil production to 1.25 million barrels per day. The Minister of State Petroleum Resources remains optimistic, pledging to surpass the 1.7 million bpd budget target. However, persistent oil theft and a need for economic diversification underscore uncertainties in Nigeria’s oil-dependent revenue landscape.
GHANA: Ghana’s Cedi Expected to Strengthen with Improved Foreign Exchange Liquidity
The Ghanaian cedi is anticipated to see further marginal gains this week due to enhanced foreign exchange liquidity, facilitated by the timely intervention of the Bank of Ghana. With banks exchanging around $750 million for cedi liquidity to comply with unified currency reserves, the local currency experienced a 0.82% weekly increase, trading at ¢12.18 to one dollar. Analysts project sustained improvement in foreign exchange liquidity and anticipate continued cedi strength, especially with Parliament’s approval of a $350 million World Bank loan for developmental projects, providing additional inflows and supporting near-term stability. The cedi, currently at ¢12.50 in the retail market, had depreciated by about 14% against the dollar since January 1, 2023, and approximately 24% on the interbank market.
EGYPT: Egyptians Vote in Presidential Election Amid Low Enthusiasm
Egyptians cast ballots in a presidential election set to secure President Abdel Fattah al-Sisi’s victory for a new six-year term. Many citizens express apathy, believing voting won’t impact their lives. Authorities urge participation until polls close at 9 p.m. Results expected on Dec. 18. Sisi, in power since 2013, faces criticism for human rights issues. The election takes place in the new capital under construction, drawing mixed reactions on its necessity amidst economic challenges.
ANGOLA: Angolan Parliament Set for Final Vote on 2024 State Budget
The final vote on the draft law approving Angola’s General State Budget for 2024 is scheduled for Wednesday in Luanda during an extraordinary plenary meeting of the National Assembly. The Joint Opinion Report of the Draft Law was detailed and approved on Monday, with 40 votes in favor, 18 against, and no abstentions. The proposed budget, presented by Finance Minister Vera Daves, includes a 5% salary increase for the civil service, with estimated revenues and expenses both set at 24 billion Kwanzas. The budget anticipates 2.8% growth in 2024, driven by a 4.6% increase in the non-oil sector