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Tuesday, 30 Jun 2020

Uganda becomes first African country to submit REDD+ results, paves way for payments

Insights Africa

Economic Outlook

Economic Outlook

  • Africa's projected Gross Domestic Product (GDP) growth of 2% for 2020 is now expected to decrease further to -0.8 % due to prolonged partial and total lockdown of countries brought on by the Covid-19 pandemic. With more than 41 countries still imposing curfews and stay-at-home guidelines, sectors that depend on social interactions such as aviation, hospitality, tourism and entertainment will have little revenue.
  • Uganda has become the first African country to submit results for Reducing emissions from deforestation and forest degradation (REDD+) to the United Nations Framework Convention on Climate Change (UNFCCC). The results submission to the UNFCCC has paved the way for potential results-based payments to the country.
  • UgUganda’s import bill has dropped by 46.6% in April 2020, the lowest in three-years, according to the Bank of Uganda (BoU). Uganda imported goods worth 1.2 TR UGX (334 MM USD) compared to 1.8 TR UGX (491 MM USD) in March 2020.
  • The International Monetary Fund (IMF) stated that central banks must access and support critical sectors of the economy if financial stability is to be maintained in Uganda as well as design support programs that could minimize moral hazard and risks to such markets.
  • Rwanda has launched a new mineral export certificate to curb allegations of smuggling of precious metals from the Democratic Republic of Congo. The new export certificate is for all minerals not usually covered by the International Conference on the Great Lakes Region (ICGLR) export certificate.
  • As the effects of coronavirus pandemic continues to disrupt businesses in Kenya, many companies are struggling to cope up with the deadly disease that has killed more than 400,000 people globally. In Kenya, many companies have closed shop and rendered thousands of employees jobless. One of the major reasons that has seen many processing companies’ close shop is the high cost of energy with low production from their factories and lack of markets.
  • In 2020, Rwanda is the only African country ranked in the top 10 of the World Economic Forum’s Global Gender Gap Report. It ranked in the top four in the Report’s political empowerment category, in recognition of the high proportion of Rwandese women lawmakers and ministers.
  • Rwanda Development Board (RDB) announced the reopening of tourism activities as well as the resumption of international travel for charter flights. Stressing that travelers health safety is their top priority by placing robust health and safety guidelines in place.
  • Zimbabwe suspended trade on the stock exchange and mobile phone-based payments to address what President Emmerson Mnangagwa’s government called “criminality and economic sabotage”.
Political Events

Political Events

  • The federal Nigerian government has approved what it called "safe reopening" of schools nationwide in the next phase of the gradual easing of lockdown ordered to curtail further spread of COVID-19. The government also lifted the ban on interstate travels. Interstate travels can, however, only be done outside curfew hours with effect from July 1, 2020.
  • The International Press Institute (IPI), a global network of editors, media executives and leading journalists for press freedom, condemned the Tanzanian government’s banning of the Tanzania Daima newspaper. The government of Tanzania issued an order on June 23 banning the print and distribution of the newspaper within and outside the country. The government has accused Tanzania Daima of ignoring national laws and journalism ethics in its reporting.
Stock Market

Stock Market

  • About 5% of Kenyan retirees’ money invested in quoted securities at the Nairobi Securities Exchange (NSE) in December 2019. However, by the end of May 2020, Kenya’s stock market plunged to a 17-year low with the NSE 20 Share Index decreasing to 1,958.5 points compared to 2,666.9 points in January 2020.
  • Nigeria investment climate, especially that of the stock market, is taking a hit as investors show indifference towards banking stocks despite a strong combined profit in excess of 260 BN NGN (670 MM USD) by 11 banks listed on the Nigerian Stock Exchange (NGSE).

                         Note:  Weekly values are calculated on Friday of each week.

Companies Transactions

Companies Transactions

  • Nissan Motor Co aims to launch seven new models in Africa over the next two years, as the Japanese automaker seeks to focus on high-growth markets to try to weather the impact of the Covid-19 crisis. The company announced a plan last month to cut the number of models it makes globally and improve efficiency after the pandemic triggered its first annual loss in 11 years.
  • Vivo Energy Kenya, the distributers and marketers of Shell-branded fuels and lubricants in the country, has produced an additional 100,000 liters of hand sanitizers for free distribution by the government. This brings the organization’s sanitizer production during the COVID-19 pandemic to 350,000 litters.
  • Kenyan commercial banks recorded a 7% decrease in profit before tax in Q1-2020 as the economic disruption from the Covid-19 pandemic started being felt in the economy. The Central Bank of Kenya (CBK) indicates that commercial banks recorded 76.3 BN KES (716.6 MM USD) in profit before tax in Q1-2020 compared to 82.7 BN KES (778.7 MM USD) made over a similar period last year.
  • Shareholders of Britam Holdings have approved a final dividend of 25 cents per share for the financial year that ended on December 31, 2019. The approval was made during the company’s 24th Annual General Meeting (AGM), which was held virtually. The group reported a net profit of 5 BN KES (32.87 MM USD) in 2019 from a pre-tax loss of 2.2 BN KES (20.6 MM USD) in 2018, where no dividend was declared.
  • Ethiopia’s communications regulator Safricom received twelve bids for the two telecom licenses it plans to award to multinational mobile companies, breaking the state monopoly.
  • Nine bidders are telecom operators and two non-telecom operators. Bidders include Etisalat, Axian, MTN, Orange, Saudi Telecom Company, Telkom SA, Liquid Telecom, Snail Mobile, and Global Partnership for Ethiopia, a consortium of telecom operators made of Vodafone, Vodacom, and Safaricom.
  • The Coca-Cola Foundation and its bottling partners, Coca-Cola System has committed a total of over 530 MM KES (4.9 MM USD) to support governments, communities and local economies in their urgent efforts to contain the spread and impact of the Coronavirus.
  • Kenya Airways (KQ) could lose up to 500 MM USD in revenues by the end of 2020, due to disruptions associated with the coronavirus, which has grounded the airline's passenger operations. So far, KQ has already lost an estimated 100 MM USD due to the pandemic which forced the country to suspend international flights on March 25.
  • In Zambia, ZCCM Investments Holdings (ZCCM-IH) has prioritized investments in the mining sector particularly in other minerals such as gold and manganese. As mandated by Government to harness the gold potential in the country, ZCCM-IH strategy is to forge partnerships with any industry player within the gold value chain.
  • The Equity Bank announced a decrease in Q1-2020 profits on provision for high loan loss. Aggressive provisions saw the cost of risk rising to 3.24% up from 0.37%. However, the group’s total income grew by 13% to 19.7 BN KES (184.45 MM USD) in Q1-2020 compared to 17.5 BN KES (163.85 MM USD) in Q1-2019.


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