{"id":3569,"date":"2021-03-19T00:00:00","date_gmt":"2021-03-19T00:00:00","guid":{"rendered":"https:\/\/staging.azafinance.com\/2021\/03\/19\/tanzania-in-mourning-as-vp-hassan-takes-reins\/"},"modified":"2021-03-19T00:00:00","modified_gmt":"2021-03-19T00:00:00","slug":"tanzania-in-mourning-as-vp-hassan-takes-reins","status":"publish","type":"post","link":"https:\/\/azafinance.com\/tanzania-in-mourning-as-vp-hassan-takes-reins\/","title":{"rendered":"Tanzania in mourning as VP Hassan takes reins","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"\n

East Africa leads post-COVID resilience<\/strong><\/p>\n\n\n\n

After the worst recession in over half a century,\u00a0Africa’s economy is poised for a rebound,\u00a0underpinned by an expected resumption of tourism, gains in commodity prices, and a rollback of pandemic-induced restrictions.\u00a0The\u00a0African Development Bank\u00a0predicts 3.4% GDP growth for 2021, in a report this week. It also sets out the considerable economic damage inflicted during 2020: an economic contraction of 2.1%, reduction of\u00a0income per capita by 10%\u00a0in nominal terms,\u00a0and\u00a0a doubling of fiscal deficits to a\u00a0record\u00a0high 8.4%\u00a0of GDP. Debt burdens are\u00a0likely to jump\u00a0by 10 to 15 percentage points in the short to medium term. Exchange rate fluctuations have been elevated, inflation has inched up, and external financial inflows have been heavily disrupted, according to the AfDB.
Against this backdrop, East Africa emerges as the most resilient region, thanks to less reliance on primary commodities and greater\u00a0economic\u00a0diversification.\u00a0The decline in real GDP was lower than the continent\u2019s average, at 0.7% for 2020 (it jumped by 5.3% in 2019).\u00a0The recovery of GDP growth in 2021 is likely to be led by Djibouti (9.9%), Kenya (5%), Tanzania (4.1%), and Rwanda (3.9%), AfDB predicts. Southern Africa, the region that was hardest hit by the pandemic, with an economic contraction of 7% last year, is projected to grow by 3.2%\u00a0in\u00a02021.\u00a0West African GDP is set to expand by 2.8% this year as lockdowns are eased and commodity prices rebound, after\u00a0contracting by 1.5%\u00a0in 2020. Some West African countries maintained positive growth in 2020 thanks to more targeted and less restrictive lockdowns\u00a0\u2014including Benin (2.3%), C\u00f4te d\u2019Ivoire (1.8%), and Niger (1.2%).<\/p>\n\n\n\n

Nigeria\u2019s inflation spikes to 4-year high<\/strong>\u00a0

Nigeria’s\u00a0inflation rate rose to\u00a0its highest level in four years at\u00a017.33% in February, from 16.47% a month earlier, according to\u00a0the National Bureau of Statistics.\u00a0This had little impact on the Naira, which\u00a0remained stable\u00a0at 485\u00a0to the dollar on\u00a0the parallel market.\u00a0Since February 26, the official exchange rate\u00a0has stood at\u00a0410,\u00a0a 7.6%\u00a0devaluation\u00a0from 379 previously published on the\u00a0Central\u00a0Bank\u00a0of Nigeria’s\u00a0website. Any further devaluations leading to a convergence of the official and parallel market exchange rates could encourage the World Bank in its discussions with the Nigerian government. The Bank is\u00a0withholding a $1.5 billion loan until the government implements currency reforms\u00a0in order\u00a0to attract\u00a0foreign\u00a0investment.\u00a0A\u00a0liquidity crisis in the foreign\u00a0exchange market was highlighted by a $1.86 billion decline in external reserves over the past seven weeks to\u00a0$34.66 billion\u00a0on March 10. The reduction is in spite of the rising trend in\u00a0crude oil prices, with Nigeria\u2019s Bonny Light jumping to $69.35\u00a0per barrel\u00a0on March 11\u00a0from $46.67 per barrel on November 30. In the\u00a0coming\u00a0week, we expect the currency to remain stable on both the parallel market and the NAFEX window while we await any major\u00a0news that could\u00a0drive the currency in either direction.
<\/p>\n\n\n\n

Ghana tax hike raises growth concerns<\/strong>

The\u00a0Cedi weakened to 5.7500\u00a0to the dollar\u00a0from 5.7265 levels last week.\u00a0Finance Minister\u00a0Ken Ofori-Atta\u00a0announced a set of new\u00a0taxes on fuel,\u00a0health,\u00a0and\u00a0financial\u00a0services\u00a0in his annual budget presentation on March 12, imposing a\u00a01% rise\u00a0in the National Health Insurance Levy and a 1%\u00a0increase in the VAT Flat Rate. There is also an\u00a0Energy\u00a0Sector\u00a0Recovery\u00a0Levy of 20 pesewas and a Sanitation and Pollution Levy of 10 pesewas per liter of petrol and diesel.\u00a0The tax rises risk\u00a0slowing economic growth and\u00a0deeply impacting personal spending as incomes have been severely affected by the pandemic.\u00a0We expect the exchange rate to slip further towards 5.76 levels.<\/p>\n\n\n\n

Rand\u00a0buoyed by Fed and falling infections<\/strong>

The Rand gained ground this week, trading at 14.70 to the dollar compared to 14.94\u00a0at last week’s\u00a0close, as international investors were prepared to take on\u00a0riskier assets following the US Federal Reserve’s assurances that interest rates will remain near zero.\u00a0A steep decline in COVID-19 cases in the country to 1,000 a day on March 17 from a daily 22,000 in mid-January also brightened the country’s economic prospects significantly.\u00a0The reduction has surprised\u00a0most experts, as there has not\u00a0been a stringent lockdown or a mass vaccination\u00a0programme.\u00a0Weighing against the positive mood,\u00a0Eskom, South Africa\u2019s\u00a0state-owned\u00a0electricity\u00a0company,\u00a0indicated that further power outages are on the cards. The country’s\u00a0electricity generation infrastructure\u00a0has a current 4,000MW\u00a0deficit.\u00a0This\u00a0could disrupt industrial and manufacturing\u00a0production\u00a0and impact the\u00a0balance of trade,\u00a0putting a\u00a0strain on the\u00a0Rand in the near term. We expect\u00a0the\u00a0exchange rate to hover short-to-medium term\u00a0in the range of\u00a014.70 to 15.10.
<\/p>\n\n\n\n

Egyptian remittances jump during COVID<\/strong>\u00a0

The Egyptian pound traded steadily\u00a0in the range of\u00a015.69 to 15.71\u00a0to the dollar this week against a close of 15.69 last Friday, amid\u00a0expectations for the Central\u00a0Bank of Egypt to hold\u00a0interest\u00a0rates\u00a0steady (the overnight deposit and lending rates\u00a0are\u00a0at 8.25% and 9.25%, respectively) at its\u00a0Monetary Policy\u00a0Committee\u00a0meeting on Thursday. The\u00a0Central Bank of Egypt reported that the country’s\u00a0consumer price index recorded a monthly rate of 0.3% in February, compared to 0.5% a month earlier and 0.2% in February last year. Meanwhile, annual core inflation stabilised at 3.6% in February.\u00a0Remittances from Egyptian expatriates\u00a0surged by\u00a010.5%\u00a0or $2.8 billion\u00a0during\u00a02020\u00a0to\u00a0a\u00a0record $29.6 billion, according to the central bank.\u00a0Between\u00a0October\u00a0and\u00a0December 2020, remittances from Egyptian expatriates\u00a0reached $7.5 billion,\u00a0compared to $ billion during the same period of 2019.\u00a0For the coming week, we expect the\u00a0pound to\u00a0remain\u00a0steady,\u00a0supported by low inflation.
<\/p>\n\n\n\n

Senegal anti-government protests target French businesses<\/strong>

Anti-French sentiment has been on the rise as protests continue in Dakar, the Senegalese capital. Scores of French-owned businesses across the city have had their windows smashed during the past couple of weeks, as angry youths and opposition protestors associate France with the government of President Macky Sall. French supermarkets, petrol stations, and mobile phone booths were torched as mostly peaceful protests against rampant inequality, government corruption, and stringent COVID-19 restrictions morphed into anger against the former colonial power.<\/p>\n\n\n\n

Higher fuel price and extended lockdown dent Kenya optimism\u00a0<\/strong>

The\u00a0Shilling\u00a0remained stable\u00a0at 109.7\u00a0to the dollar\u00a0this week.\u00a0The country’s\u00a0Energy and Petroleum Regulatory Authority (EPRA)\u00a0on March 14 imposed a\u00a0KES 7.63 price increase on a litre of\u00a0petrol to KES 122.81, and KES 5.75 for diesel to KES 107.66. The regulator cited the\u00a0cost of imported Super Petrol\u00a0jumping\u00a0by 14.97%\u00a0since January.\u00a0The hikes pose a challenge to Kenya\u2019s recovery from the COVID-19 crisis. At the same time,\u00a0President Uhuru Kenyatta has extended the nation\u2019s\u00a0COVID-related\u00a0curfew by 60 days\u00a0and banned political and social gatherings. Kenyatta said that the economy had lost around\u00a0KES 560 billion ($5.6 billion) of GDP\u00a0last year because of the pandemic and the lockdowns.\u00a0With the\u00a0African Development Bank\u00a0forecasting, the country’s economy will rebound by 5% this year, and inflation\u00a0projected to remain within the Central Bank of Kenya\u2019s target range of 2.5%\u00a0to 7.5%, we foresee a stable\u00a0Shilling in the short-to-medium term.<\/p>\n\n\n\n


Uganda receives $229.5m loans from African Development Bank<\/strong>

The\u00a0Shilling dropped\u00a0slightly\u00a0during the week and\u00a0traded\u00a0at 3660\/3670\u00a0to the dollar\u00a0levels from 3655\/3665 last week, mostly on the back of continuing demand for dollars on the part of companies.\u00a0The\u00a0government and the African Development Bank (AfDB) signed a $229.5m financing facility for the Kampala-Jinja Expressway, under a public-private partnership deal.\u00a0The highway will facilitate faster movement of goods and services and support the economy by providing job opportunities and boosting\u00a0trade and investment in the country. We expect the\u00a0Shilling to continue\u00a0to\u00a0hold\u00a0steady\u00a0within the 3660\/3670 range\u00a0during\u00a0the coming week\u00a0as pressure from dollar demand\u00a0by corporates\u00a0is matched by inflows from lenders and agricultural product\u00a0exports.

Tanzania in mourning as VP Hassan takes reins<\/strong>

We expect a slowdown in\u00a0economic activities\u00a0during the\u00a0next few days as Tanzania mourns\u00a0the death of\u00a0President John Magufuli. He had been serving his second term after being re-elected in 2020. Vice President Samia Suluhu Hassan\u00a0said\u00a0the country would\u00a0enter\u00a0a 14-day period of mourning as arrangements for the burial are made.\u00a0Magufuli, who spearheaded an anti-corruption drive, became notorious internationally for his skeptical stance on COVID.\u00a0According to Tanzania\u2019s\u00a0constitution,\u00a0Vice\u00a0President Hassan\u00a0was\u00a0sworn in today and has assumed the presidency for the remainder of the five-year term. We foresee some pressure on the\u00a0Shilling as the new administration and businesses adjust to the changes.<\/p>\n","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"excerpt":{"rendered":"

East Africa leads post-COVID resilience After the worst recession in over half a century,\u00a0Africa’s economy is poised for a rebound,\u00a0underpinned by an expected resumption of tourism, gains in commodity prices, and a rollback of pandemic-induced restrictions.\u00a0The\u00a0African Development Bank\u00a0predicts 3.4% GDP growth for 2021, in a report this week. It also sets out the considerable economic […]<\/p>\n","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"author":1,"featured_media":3570,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[19],"tags":[278,249,22,296,204,205,206,207,316,209,308,26,27,365,32,363,364,354,396,298,299,34,397,217,300,218,357,301,192,231,33,302,252,366,398,257,303,304,182,358,359,305,253],"class_list":["post-3569","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fx-insights","tag-africa-covid19","tag-africa-debt","tag-africa-foreign-exchange","tag-africa-forex","tag-african-currencies","tag-african-currencies-forex","tag-african-currencies-naira","tag-african-currencies-vs-dollar","tag-cedi-vs-dollar","tag-covid-19-africa","tag-covid-19-kenya","tag-egypt","tag-egyptian-pound","tag-egyptian-pound-vs-dollar","tag-ghana-cedi","tag-ghana-cedi-in-dollar","tag-ghana-cedi-rate","tag-kenya-2021","tag-kenya-maize-ban","tag-kenyan-shilling-rate","tag-kenyan-shilling-vs-dollar","tag-naira","tag-naira-4-dollar","tag-naira-after-lockdown","tag-naira-rate","tag-naira-rate-covid-19","tag-naira-usd-liquidity","tag-naira-vs-dollar","tag-rand","tag-rand-range","tag-rand-rate","tag-rand-vs-dollar","tag-senegal","tag-senegal-economy","tag-senegal-protests","tag-tanzania","tag-tanzanian-shilling-rate","tag-tanzanian-shilling-vs-dollar","tag-uganda","tag-ugandan-election","tag-ugandan-shilling-election-rate","tag-ugandan-shilling-rate","tag-xof"],"acf":[],"gt_translate_keys":[{"key":"link","format":"url"}],"_links":{"self":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/posts\/3569","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/comments?post=3569"}],"version-history":[{"count":0,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/posts\/3569\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/media\/3570"}],"wp:attachment":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/media?parent=3569"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/categories?post=3569"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/tags?post=3569"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}