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Africa Headlines

Nigeria’s CBN continues to tighten monetary policy to contain exchange rate volatility – Yemi Cardoso, the governor of Nigeria’s apex bank has been providing a systematic and methodical measures to contain the excessive liquidity in the economy that is directed towards the holding of the US dollars and driving up the volatility of the Naira. On Wednesday, the Bank issued Treasury Bills more than a trillion Naira, including N600 billion for 364 days. It is consistent with recent approaches and complements the over one trillion and N320 billion raised in December 2023 and January 2024, respectively. It comes amidst market expectations that the monetary policy committee (MPC) will raise the monetary policy rate from the current 18.75% when it meets for the first time under the current leadership February 25 - 26. The expectation is a raise of between 100 – 300 basis points. The Naira has suffered terrible weakness in the last 8 months following the announcement that the previous government borrowed N22 trillion illegally from the Central Bank and JP Morgan released a report that suggested that Nigeria’s foreign reserves was much lower than initially thought. 

Shell to make final investment decision on Bonga North this year – After divesting its onshore investments in Nigeria, Shell seeks to deepen and expand its investments offshore in the country. It is expected to make final investment decision (FID) on the 350 million barrels of crude oil Bonga North Deepwater field. The project is a Shell Nigeria Exploration and Production Company Ltd (SNEPCo). The project will be an extension of the current Bonga production that started in 2015. SNEPCo has 55% as the operator. It is a production sharing contract with the Nigerian National Petroleum Corporation (NNPC) Ltd. SNEPCo is also expected to make an FID on the HI and HA gas projects. These plans come amidst a renewed attempt under President Bola Ahmed Tinubu to expand oil and gas production in the country. This year, the government has targeted a 1.7 million barrels of crude oil production per day. The HI and HA gas projects are tied to train 7 production by the Nigeria Liquified Natural Gas (NLNG) projects.

President Tinubu releases grains from strategic reserves as Egypt raises minimum wage by 50% – The cost of living crisis in African economies continues to bite. In response, President Bola Tinubu of Nigeria yesterday instructed the release of 42,000 metric tonnes of grains, including maize, millet, and garri from the country’s strategic reserves. The country’s rice miller association also committed to releasing 60,000 metric tonnes to the market to drive down the rising costs of food. It comes as two of the country’s labour unions the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) plans another strike, giving the government 14-day ultimatum. In Egypt, starting March 2024, the country’s minimum wage will go up by 50% to 6,000 Egyptian Pounds, nearly US $200. It compares favourably with Nigeria with a minimum wage of about US $30. 

ECOWAS foreign ministers meet amidst deepening democratic strains in West Africa – West African foreign ministers held emergency meeting in Nigeria's capital, Abuja, to address the political crisis in Senegal and disputes with military rulers in three other member states of the Economic Community of West African States (ECOWAS). The meeting follows President Macky Sall's decision to delay elections in Senegal, which comes after Burkina Faso, Mali, and Niger declared their withdrawal from the bloc. ECOWAS has urged Senegal to return to its election timetable, but doubts have been raised about the bloc's influence over defiant member states. The handling of the crises in the region has implications for ECOWAS's reputation and role. Trade sanctions have been imposed in the past, but their impact on citizens has been significant, and military regimes remain in power. 

S Africa’s Ramaphosa renews call for Gaza ceasefire, Palestinian state amidst election cycle – During his State of the Nation Address, South African President Cyril Ramaphosa reiterated his country's commitment to securing a ceasefire in the Gaza conflict and advocating for a two-state solution between Israel and Palestine. South Africa has filed a case at the International Court of Justice (ICJ) accusing Israel of genocide in Gaza, and the ICJ has issued an interim ruling stating that it has jurisdiction to hear the case and ordering Israel to prevent genocidal acts. Ramaphosa welcomed this ruling and condemned the killing of civilians on all sides. He called on all parties involved to commit to a peace process that would lead to a two-state solution. South Africa views its case at the ICJ as a success and intends to continue using diplomatic and legal means to support the Palestinian cause and promote peace in the region. The call comes amidst the start of election cycle in South Africa. The date of the election will be set by the President shortly because it must be within a 90 expiration of the current mandate which ends in May 2024.

Global Headlines

India’s oil demand shift to Russia keeping oil prices stable – Since the start of the Russia / Ukraine was in February 2022, India’s crude oil demand has significantly shifted from Middle East to Russia. The Indian government believes this shift is keeping the lid of oil price and preventing it from rising to about US $150 per barrel. Moscow currently accounts for 36% of India’s crude oil import. Oil prices have continued to hover between US $70 and US $85 per barrel, keeping both suppliers and buyers slightly happy at the stable level of prices. However, there have been considerable supply management by the Saudi led oil producing exporting countries (OPEC). Most of the growth in oil demand is expected to come from India between now and 2030 following the increase in growth in the country. Last year, India became the fifth largest economy in the world and the largest populated country at 1.4 billion people after overtaking China. 

UN committee urges Russia to end ‘forcible transfer’ of Ukrainian children – The United Nations Committee on the Rights of the Child has called on Russia to cease the forcible transfer of children from occupied areas of Ukraine and reunite them with their families. The committee's conclusions urged Russia to end the practice and investigate allegations of war crimes against Russia's commissioner for children's rights, Maria Lvova-Belova. Russia has argued that the placements of evacuated children are done with their consent, but Ukraine alleges that 20,000 children have been taken to Russia without the consent of their families or guardians. The International Criminal Court (ICC) is seeking the arrest of Russian President Vladimir Putin for alleged illegal deportation of children, a claim denied by the Kremlin. The committee also expressed concern about the impact of Russia's war in Ukraine on children, including killings and injuries resulting from indiscriminate attacks.

Russia’s Putin and China’s Xi denounce US ‘interference’ – Russian President Vladimir Putin and Chinese President Xi Jinping have criticised what they perceive as US interference in the internal affairs of other nations during a phone call. The leaders discussed the need to establish a multipolar world order and denounced the US policy of containment towards Russia and China. The strengthening ties between Moscow and Beijing have raised concerns in the West as the two countries seek to expand their global influence. Russia has turned to China for economic support following Western sanctions imposed after the Ukrainian conflict, while China benefits from Russian energy imports and access to natural resources. Bilateral trade has increased significantly, reaching US $218.2 billion in the first eleven months of the previous year. The leaders also discussed the situations in Ukraine and the Middle East, expressing alignment on those issues. They emphasized the importance of building a reliable financial infrastructure for payments and affirmed their commitment to oppose external interference in their internal affairs.

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