• Rate likely to improve further as pound appreciates vs USD
• Total deposits excluding government and foreigners' deposits rose 23% y/y and their stock covers bank loans twice

The Deposit Dollarization Rate fell by strong 50bps m/m to 25.6% as of end-August after falling by 30bps m/m in the preceding month, according to CBE monetary data. The m/m decline came as a result of a falling stock of foreign currency deposits, while total deposits expanded on the month. More specifically, the m/m drop in the foreign currency deposits was driven by the falling stock of time and saving deposits, although the stock of demand deposits of the households and the private business sector increased. We attribute the drop in the value of foreign deposits to the recent appreciation of the pound and we think the deposit dollarization rate will drop further in the coming months as the pound has gained even more strength in September. We remind that remittance inflows through the official banking channels have improved considerably, which coupled with strong portfolio and FDI inflows boosted FX liquidity and shored up the pound.

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Meanwhile, the total bank deposits - excluding government deposits and the deposits held by foreigners (external sector) - rose by 23.4% y/y to EGP 12.0tn as of end-month following a 22.9% y/y increase in the preceding month. According to our estimates, the bank loans to total bank deposits ratio has remained stable at around 50%. The IMF had noted that while banks are reported to remain compliant with regulatory limits, foreign currency loans, particularly to public sector entities, are not fully matched by foreign currency deposits (particularly on the balance sheets of the biggest banks). This implies a potential vulnerability to exchange rate movements, including through credit risks. Banks remain compliant with regulatory limits on net foreign exchange open positions, according to the available data.

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• Domestic credit expands robustly y/y driven by lending to private business sector, households and government
• Government accounts for 57% of all received loans
• CBE claims on central governments edge down in August, but remain elevated
• CBE promised to stop direct financing to government agencies

Private business sector credit expanded by a strong 22.6% y/y to EGP 3.07tn (USD 64bn) as of end-August (about 20% of GDP), slowing from a 32.8% y/y increase in February, according to monthly data release by the central bank (CBE). Most of the funds are channeled into the industry and services sectors, each accounting for about 25% of total loanable funds, but a more detailed breakdown is not available. Lending to the private corporate sector has remained robust despite the economic uncertainty and high nominal interest rates, which has fueled a revival in private investments and a recovery in domestic demand. Looking at m/m dynamics, the expansion of loans to the business sector was underpinned by a modest 1.1% m/m growth, edging down from a 1.3% m/m increase in the previous month. Claims on private sector companies account for about 20% of total domestic credit as lending to the government continues to dominate the credit market. Growth in lending to households has also remained strong, expanding by 26.6% y/y in the month (previously: 26.2% y/y) and accounts for about 9% of total credit in the economy.

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Overall, the expansion of credit to the private economy (business plus households) has recovered and is likely to strengthen further as consumer inflation moderates, non-oil manufacturing expands, and nominal interest rates are slashed. However, elevated broad money growth running above its historical average also contributes to existing inflationary pressures.

Lending to government

Net claims on the government, which account for 57% of total credit, rose by 1.5% m/m to EGP 8.82tn following a 3.3% m/m increase in the preceding month and the annual growth rate eased to 31.6% from 34.2% previously. The new lending to the government came entirely from the banks, who saw their net claims rising by EGP 175bn m/m, while CBE's net claims on the government fell by EGP 48bn on the month. The drop in CBE's net claims on the government was mostly due to the falling stock of credit facilities. Egypt had promised the IMF in an USD 8bn financial support agreement signed in March last year that it would reduce CBE lending to the government, which undermines monetary policy and puts pressures on the pound. Egypt told the IMF in June 2024 that it would reduce borrowing by other government agencies from the CBE by EGP 150bn by the end of June and by EGP 100bn in subsequent years until it had fallen to zero.

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Local banks have large exposure to high-yielding government securities, which has limited the decline in banks' asset quality over the past few years in which Egypt's underlying economic weaknesses have been tested by a series of external shocks. The share of NPL/total loans has remained broadly stable and low at around 3% before moderating to 2.2% as of end-March. The banking system's net foreign assets have improved recently on the back of strong portfolio inflows and tranches from the USD 35bn UAE deal.

• There had been speculations that tariff increase would be pushed back to early 2026

The government does not plan to increase electricity prices until January 2026, according to the minister of electricity. Electricity prices will be reviewed based on actual costs to determine the new price structure. This is not a surprising piece of news, as unnamed government officials already told the local press in September that the tariff adjustment would be delayed to early 2026. The recent appreciation of the pound gave some room for the delay, the sources explained.

The cost of electricity production has soared after the float of the EGP in March 2024 and Egypt's increased reliance on more expensive LNG imports. Egypt raised electricity prices by 14-40% in September 2024 and has repeatedly told the IMF it remains committed to its phase-out plan. Electricity subsidies surged to EGP 10bn in FY 2024/25, exceeding the EGP 2.5bn original budget target.

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• M/M drop due to falling foreign assets of commercial banks
• Commercial banks' NFAs remain positive for sixth straight month
• EGX recorded modest capital inflow in August

The Net Foreign Assets (NFA) of the banking system (banks + CBE) fell by EGP 30bn or 3.4% m/m to EGP 870bn (USD 18.2bn) as of end-August, following a strong 21.4% m/m increase in the preceding month, according to data released by the central bank. The fall was entirely due to falling foreign assets of the commercial banks (-USD 860mn m/m), which offset a system-wide drop in foreign liabilities (-USD 13mn m/m). We usually attribute the movements in the bank's foreign assets to capital inflows, but there was a modest net foreign purchase of T-bills recorded through the local stock market in August. The simultaneous drop in the banks' foreign liabilities (-USD 84mn m/m) suggests the resident banks may have paid off some external loans in the month under review, but the drop in foreign assets is most likely due to higher imports (e.g. more expensive LNG during the peak demand for electricity).

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We remind the system-wide NFAs stood at USD 22bn net liability as of end-February 2024 and their sharp improvement since then was due to USD 35bn UAE deal and a surge of portfolio inflows that followed the pound's float and the securing of massive external financing. While this massive inflow of hot money has raised the risks related to capital outflows and roll over risks, Egypt has largely emerged unscathed from the sell-offs triggered by Trump's tariffs and the 12-day war thanks to recent reforms and relatively large external reserves. Interestingly, the pound has appreciated since April, partly due to returning portfolio investors, and partly due to US monetary policy aimed at weakening the US dollar.

• Qatar has pledged USD 7.5bn in direct investments in Egypt
• Remaining USD 4bn Qatari investments will go towards a project on Egypt's north coast

Qatari Dar, which is owned by the Qatari sovereign wealth fund, and Mariott-owned hospitality chain St. Regis will soon launch a USD 3.5bn tourism project on the Red Sea coast, according to the local press. There are no details yet, but the local press links the investment plans with previously reported negotiations with unnamed GCC sovereign wealth fund to launch a big-ticket project in the 174 sq km Ras Shukeir zone on the Red Sea. Last month, Emaar Misr and Saudi-owned real estate developer Citystars Properties announced an EGP 900bn integrated tourism project on the Red Sea.

The Qatari-led project is a part of the larger USD 7.5bn direct investment pledge made by the Gulf country. The Qatari ambassador to Egypt said recently that the remaining USD 4.0bn will go towards a project on Egypt's north coast. He said the project will be announced "as soon as possible". Negotiations with the Qatari Real Estate Regulatory Authority are reportedly underway and are focusing on the final parts of the agreement.

• Pound has appreciated since April on back of strong portfolio inflows, tourism and remittances
• Foreign funds bought USD 27.3bn worth of debt notes through EGX since March 2024, attracted by high nominal interest rates
• Foreign investors held USD 39.9bn worth of T-bills as of end-May, according to CBE data

Foreign institutional investors bought EGP 273bn worth of T-bills and bonds through the local exchange (EGX) in September and sold EGP 188bn worth of the debt instruments, recording a net acquisition of EGP 86bn (USD 1.8bn) in the month, according to datafrom the local bourse. The non-Arab institutional investors, who we believe are more sensitive to global and regional volatility, recorded a net inflow of USD 1.1bn in the month. Egypt has weathered the two global sell-offs - the global meltdown triggered by Trump's tariffs in April and the 12-day war between Israel and Iran in June - relatively unscathed. Further, the FX market was liquid enough to accommodate smooth and orderly exit in April and June. The pound has appreciated since April, partly due to returning portfolio investors, tourism and remittance inflows and partly due to US monetary policy aimed at weakening the US dollar.

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It should be noted that the EGX launched secondary trading of T-bills relatively recently and the data is now lumped together (bonds + T-bills), with demand most likely geared almost entirely towards the short-term notes.

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The total purchases of foreign investors through EGX (including foreign Arab and non-Arab funds) was EGP 1.32tn since March 2024, resulting in a total FX inflow of USD 27.3bn through the bourse (not accounting for roll-overs and maturities). Separately, the foreign investors bought around USD 8-10bn worth of T-bills directly from the banks, according to our calculations. While this massive inflow of hot money has raised the risks related to capital outflows and roll over risks, Egypt has largely emerged from the April and June sell-offs unscathed thanks to recent reforms and relatively large external reserves. Foreign investors held USD 39.9bn worth of T-bills as of end-May, accounting for about 40% of the outstanding stock and for nearly 80% of CBE's official FX reserves. The CBE said that the foreign holdings include collaterals (contingent liabilities) worth USD 23.4bn.

• Survey reflects continued gains in output and new orders
• Cost pressures softened, with purchase price inflation at its weakest since March 2020
• Confidence remained muted but expectations for future growth supported optimism

The Stanbic IBTC Bank Nigeria PMI fell to 53.4 in September from 54.2 in August but remained above the 50.0 threshold for the tenth month in a row, indicating continued expansion. New business rose significantly driven by stronger customer demand, though the pace of growth moderated to a three-month low. The expansion in new orders translated into higher business activity across all four broad sectors covered by the survey.

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Inflationary pressures continued to ease, with overall input costs rising at the slowest pace in 30 months. This was driven by weaker increases in both purchase prices and staff costs. Purchase price inflation reached its softest level since March 2020. Staffing levels grew at the fastest rate since October 2023. At the same time, input buying surged and contributed to an accumulation of inventories.

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According to Stanbic IBTC, non-oil sector growth is expected to remain strong into 2026, supported by likely lower interest rates, subdued inflation and reduced exchange rate volatility. While companies remained optimistic about the 12-month outlook, sentiment eased slightly to a four-month low and remained below the series average.

• Disruptions occurred across oil, gas and power output during the three days
• Losses translated into 16% of oil, 30% of gas and 20% of electricity supply
• Delays affected crude lifting, maintenance work and monetised gas restoration

The Nigerian National Petroleum Company Limited (NNPC) on Wednesday (Oct 1) reported heavy losses following a three-day strike by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN). In a letter addressed to regulatory authorities and security agencies, NNPC chief executive officer Bashir Ojulari said the industrial action disrupted oil, gas and power production nationwide. Within the first 24 hours, the strike deferred 283,000 barrels of oil per day, 1.7bn standard cubic feet of gas daily and more than 1,200 megawatts of power generation. This translated into 16% of oil production, 30% of marketed gas and 20% of electricity supply. The strike was suspended on Wednesday after a resolution was reached between PENGASSAN and the Dangote Refinery.

Despite the suspension of the strike, Ojulari stressed that losses had already reached critical levels. According to him, scheduled maintenance works had been delayed, crude lifting operations disrupted and demurrage costs triggered at export terminals. Further, about 100,000 bpd of crude oil and 1.34bn standard cubic feet of monetised gas expected to be restored were delayed. He said the strike's impact went beyond Dangote's operations, affecting national revenues and the country's energy infrastructure. The NNPC warned that unless a sustainable resolution was achieved, disruptions would continue to place national energy stability under severe strain.

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• Foreign inflows rose by 88% m/m, foreign outflows fell by 20%
• Total market turnover fell by 50% m/m to NGN 908bn
• The fall was due to the absence of block trades that dominated in July

Net offshore portfolio flows into Nigerian equity recorded a surplus (net inflow) in August of NGN 18.47bn (USD 12.4mn), according to NGX data. This follows a deficit of NGN 45bn in July. Foreign inflows rose by 88% m/m, to NGN 95.14bn from NGN 50.5bn in July. Meanwhile, foreign outflows fell to NGN 76.67bn from NGN 95.5bn in July, a 20% drop. Overall market turnover also fell, by 50% m/m to NGN 908.4bn from the record-high of NGN 1.8tn in July. August saw stronger foreign participation, with foreign portfolio investment (FPI) activity on the NGX accounting for 19% of the total market turnover compared to just 8% in July.

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Domestic transactions dropped by 56% m/m to NGN 736.6bn from NGN 1.67tn in the previous month (which had been driven largely by block trades). Domestic activity weakened across both retail and institutional segments. In addition to the influence of large block trades, analysts caution that the sharp monthly decline in domestic activity reflects market volatility. For the year-to-date, total domestic transactions reached NGN 5.5tn and accounted for about 79% of total activity. Total transaction value on the NGX reached NGN 6.9tn for the year-to-date as of August, up 99% from NGN 3.5tn for the same period in 2024.

Question:

Can I please have a link to the the gross financing amount (domestic) for Nigeria for this financial year?

The question was asked in relation to the following story: New external financing plan does not mean immediate debt rise - FinMin

Answer:

The FG plans domestic borrowings of NGN 7.4tn in 2025 (and NGN 1.8tn in foreign borrowings) to plug a budget deficit of NGN 13.1tn. This can be found in the 2025 MTEF on page 41 of 70 (here). Please note that since the publishing of the framework, the president increased the budget from NGN 47.9tn to NGN 54.9tn, which we covered here. However, the government did not publish an updated MTEF.

Question:

Do you know what would/could happen for banks which fail to meet recapitalisation requirements in time for the CBN deadline?

The question was asked in relation to the following story: Recapitalisation deadline puts pressure on tier-2 banks - report

Answer:

The CBN said it will be taking regulatory action against banks that don't meet the deadline. This may possibly include more monitoring, increased oversight and sanctions. Based on the CBN's framework and past recapitalization exercises (2004-2005 as well as 2009), non-compliant banks could face forced mergers or acquisitions with stronger institutions, license downgrades or revocations, or regulatory penalties such as fines or operational restrictions. Some local analysts also think temporary forbearance may be granted if a bank showed genuine efforts to raise capital. The exact actions will depend on the specific circumstances of each bank and the CBN's assessment.

• Kingdom issues USD 1.5bn sukuk and USD 1bn conventional bond amid strong USD 8.4bn investor demand

Bahrain raised USD 2.5bn through a dual-tranche dollar-denominated benchmark offering, combining an 8-year sukuk with a 12-year conventional bond, making it the latest Gulf state to tap international debt markets. The sukuk, issued under the central bank's International Sukuk Programme Company, raised USD 1.5bn with a coupon rate of 5.875%, tightened from initial price thoughts in the 6.25% area. The conventional bond, issued via the finance and economy ministry, secured USD 1bn at 6.625%, narrowed from initial price thoughts near 7%.

Investor demand was strong, with combined order books above USD 8.4bn. The sukuk matures in February 2034 and the conventional bond in October 2037. Both are rated B+ by S&P and Fitch and will be listed on the London Stock Exchange. The sukuk falls under Bahrain's Trust Certificate Issuance Programme, while the conventional notes come under the Global Medium Term Note Programme. Joint bookrunners included Abu Dhabi Commercial Bank, Bank ABC, Citi, First Abu Dhabi Bank, GIB Capital, JP Morgan, and Standard Chartered, with Sharjah Islamic Bank participating on the sukuk.

The deal aligns with Moody's projection that Bahrain would raise between USD 2bn and USD 3bn in international bonds this year to refinance debt amid lower oil revenues. It is the kingdom's second major international issuance in 2025, coming as GCC peers Kuwait, Abu Dhabi and Saudi Arabia also launched large debt sales in recent weeks.

EmergingMarketWatch coverage of Israel will be limited on 02 Oct 2025 due to a public holiday.

• Only investment abroad decline due to NIS appreciation
• Shares of foreign assets and foreign currency assets continue declining

The balance of the public's financial assets portfolio rose by NIS 343bn or 5.5% to NIS 6.6tn at the end of June, according to latest data of the Bank of Israel (BoI). The share of the portfolio in GDP rose by some 13.8pps to about 323.5% of GDP because of a larger increase in the portfolio than the nominal GDP.

Most of the increase in the portfolio came from tradable equities in the country that added almost NIS 200bn to the portfolio in Q2. This was due to price increases that were partly offset by net realizations. Cash and deposits (up by NIS 94.1bn), other assets (up by NIS 42.8bn), government bonds (up by NIS 20.7bn) and tradable corporate bonds (up by 15.2bn due to price increases and net investment) were the other components that had positive contribution for the increase. Investments abroad were the only component to mark a decline in the period (down by NIS 26.2bn) and this was on the back of the shekel appreciation. The balance of the asset portfolio managed by institutional investors rose by some NIS 176bn or 6.1% q/q to NIS 3.06tn at the end of June and this was about 46% of the total portfolio. There was a decline in the share of foreign currency assets of around 1.3pps (from 26.4% to 25.1%) and in the share of foreign assets of 1.5pps (from 20.2% to 18.7%), confirming trends from previous periods.

• Current policy rate: 4.50%
• Next monetary policy meeting: Nov 24, 2025
• Expected decision: Hold, 25bps cut possible

The MPC left the policy rate unchanged at 4.50% on Sep 29, which was largely expected. The decision seems to be mainly driven by the still high geopolitical uncertainties but volatility of inflation has likely contributed too even if it eventually entered the 1-3 target range in August. The next policy rate decision would be on Nov 24 and we think that the rate-setters will most likely remain prudent and wait for inflation to step on a more convincing downward trend. If the Gaza was has not ended by that time, we think that an on-hold decision would be a sure result.

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Inflation continued easing and eventually entered the 1-3% target band in August as it hit 2.9% y/y after exceeding 3% for more than a year. However, it came in higher than expected and some of its components are very volatile, which makes projections difficult, while other components, mainly from the non-tradable sector, continue to record relatively high price increases. Most of the volatility is due to flight tickets after a change in methodology. Still existing supply side shortages that might not close fast enough to respond to potential surge in demand are another factor that can drive inflation higher. The draft of reservists is a major supply shortage. Some upward impact might come also from rental prices after the damages to buildings by Iranian rockets, which is already seen in Jun-Aug prints. On the other hand, the shekel appreciation has been offsetting some of the upward pressure but it is not clear if the appreciation forces would continue and what forces would prevail in shaping inflation developments, we think. The latest inflation expectations, one of the major considerations the MPC is looking at when deciding on the policy rate, pointed to continued moderation in the inflation environment. The latest BoI forecast released in September sees inflation at 3.0% y/y this year and to start easing in early 2026 to 2.4% y/y on average in Q3 2026 and to 2.2% in 2026.

GDP data point to a fall in GDP in Q2 but the BoI explained that this was the sole result of the Iran war and when excluded, GDP has continued increasing in Q2. It also said that high frequency indicators point to a strong recovery in the period since the hostilities with Iran ended and some indicators are at a higher level compared to the pre-Iran war position while others are still catching up. The BoI downgraded its growth forecast for this year in its July and September updates but increased it twice for 2026 as recovery after the wars is expected to be faster. BoI governor Yaron said that there are no indications for difficulties to obtain credit so no need for easing on this part. Thus, we think that the BoI might continue the cautious approach and make sure that inflation has been entrenched within the target interval and risks to geopolitical stability have decreased further before making any move, in our opinion. Yet, we do not rule out the MPC making a bold move with a 25bps cut in the last decision for the year. The research department expects the policy rate to reach 3.75% in Q3 2026. This is not a forecast of the MPC but has likely been endorsed and if fulfilled, this means three rate cuts in the next one year.

Board statements, press briefings, minutes from MPC meetings

Calendar of MPC meetings

Latest BoI macroeconomic forecasts

Monetary policy reports

Bank of Israel Law

The Monetary Committee

• FDI inflows were driven mainly by GCC countries
• Finance, insurance, and real estate attract largest share of foreign investment in Jordan

Jordan saw a significant increase in foreign direct investment (FDI) during the first half of 2025, with inflows reaching around USD 1.05bn, which is equivalent to 4% of the kingdom's GDP, according to preliminary balance of payments data as cited by local media reports. The figure represents a 36.4% y/y rise from USD 769.8mn, or 3.1% of GDP, recorded in the same period in 2024.

The breakdown points that Arab countries accounted for 61.8% of total FDI, led by GCC nations at 35.6%. Saudi Arabia contributed 26%, followed by Bahrain at 4.8% and the UAE at 2.8%, while Iraq provided 12.1% from other Arab states. Europe contributed 16.9%, including 13.4% from EU members, 2.6% from the UK, and 2.1% from the US. Non-Arab Asian countries added 2.5%, led by India at 1.3% and China at 0.8%, with other nations making up 16.7%.

Finance and insurance attracted the largest share at 37.5%, followed by real estate (11.5%), transport and storage (6.9%), manufacturing and mining (6.7% each), quarrying (6.6%), and construction (4.1%). Investments in land and property by Jordanians represented 12.2% of total FDI. The strong inflows highlight growing confidence in Jordan's investment climate and sustained interest from regional and international investors.

• 90-octane gasoline and 95-octane gasoline prices were raised by 0.6% and 0.5%, respectively
• Kerosene prices remained unchanged

The energy ministry's fuel pricing committee has decided to raise the gasoline prices across the country as the move came into effect at the start of October. The regulator meets monthly to determine the fuel prices in the country. The committee argued that price adjustments are based on the global oil prices and other costs such as shipping and taxes. However, kerosene prices remained unchanged and will be sold at JOD 0.620 per liter.

During its meeting, the committee decided to raise the price of 90-octane gasoline by 0.6%% m/m (JOD 0.005) to JOD 0.855 per liter and the price of 95-octane gasoline by 0.5% m/m (JOD 0.005) to JOD 1.080 per liter. Meanwhile, diesel prices increased by 0.7% m/m (JOD 0.010) and stood at JOD 0.685 per liter.

We remind that the country's fuel pricing has previously sparked unrest. Around two years ago, violent protests and strikes erupted among truck, bus, and taxi drivers after the government removed the remaining fuel subsidies. Local authorities responded with mass arrests, and four police officers, including the deputy police director of Maan governorate, were killed during demonstrations that began in the southern governorate of Maan and later spread nationwide.

The energy ministry's monthly pricing adjustments aim to reflect global market movements while maintaining domestic supply stability.

• Yield remains unchanged at 5.75%

Jordan's central bank sold 5-year T-bonds worth JOD 221mn at an auction that was held on Oct 1, according to a statement by the institution. The bids submitted for the 5-year T-bonds reached JOD 221mn, of which all were retained, signaling strong investor interest. The weighted average yield on the accepted bids printed at 5.75%, the same compared to the previous issue of the same instrument on Sep 18.

We remind that the country's central bank has cut its main interest rates four times since September 2024 in line with similar moves by the US Federal Reserve due to the peg of the local currency to the US dollar. Furthermore, the kingdom's CPI inflation slowed down to 1.3% y/y in August, down from 1.7% y/y in the preceding month

• Similarly, reserves decrease 2% m/m

The total reserve assets held by the Central Bank of Kuwait decreased 10% y/y to KWD 13.0bn (USD 42.9bn) at the end of August. Similarly, official reserves decreased 2% m/m and reached the lowest level since April 2020. We remind that total reserves assets reached a record high of USD 52.8bn in February 2023.

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It should be noted that total reserve assets have decreased m/m for two consecutive months and have decreased y/y for nine consecutive months.

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Total reserve assets do not include external assets held by Kuwait Investment Authority, the country's sovereign wealth fund. We think the central bank has more than enough money to defend the currency peg. The dinar is pegged to a basket of currencies dominated by the US dollar. The central bank allows some flexibility compared with a traditional currency peg.

• Preparations proceed despite political tensions and disputes over expatriate voting

President Aoun and Interior Minister Ahmad al-Hajjar met to discuss preparations for Lebanon's upcoming parliamentary elections, stressing the need to hold them on schedule in May 2026. PM Salam echoed this commitment, vowing to guarantee fair and transparent voting for all Lebanese, including expatriates, and to ensure a safe electoral environment, particularly for residents in the south who lost homes and villages during the Hezbollah-Israel war.

We recall that Interior minister Hajjar has recently said the elections will proceed under the current law, with expatriate voter registration closing on Nov 20. Coordination with foreign minister Youssef Rajji is underway to launch registration once Rajji returns, allowing approximately 40 days for expats to sign up.

Earlier this week, the parliamentary session reviewing the process quickly turned contentious. Parliament speaker Nabih Berri threatened adjournment after a clash between MPs over alleged opposition to elections. Discussions focused on whether expatriates should vote for all 128 parliamentary seats or be limited to the six seats allocated under the current law, with Hezbollah expressing concern about confessional imbalances and campaigning limitations abroad. The session ended with walkouts, highlighting persistent political tensions ahead of the vote.

• His call comes amid continued Israeli strikes on Lebanon's south despite November ceasefire deal
• UN reports 103 deaths in 10 months and urges independent investigations into recent attacks

The UN's human rights chief Volker Turk called for renewed efforts to secure a lasting end to hostilities in Lebanon, noting that civilians continue to suffer from Israeli air strikes despite a ceasefire. Turk reported that 103 civilians have been killed in the past ten months, with jet and drone strikes causing significant damage in residential areas and near UN peacekeepers in the country's south.

We remind that Israel has continued strikes against positions it says belong to Hezbollah in southern Lebanon despite a US-brokered truce in effect since November following more than a year of conflict triggered by the Gaza war. One of the deadliest incidents occurred on Sep 21, when an Israeli drone struck a vehicle and a motorcycle in Bint Jbeil, killing five people, including three children. The Israeli military said it targeted a Hezbollah member but acknowledged that several uninvolved civilians were killed and the incident is under review. Therefore, Turk has called for independent investigations into this and other attacks.

The UN rights office reported no civilian deaths from projectiles fired from Lebanon into Israel since the ceasefire, but displacement remains high, with more than 80,000 people uprooted in Lebanon and 30,000 in northern Israel.

• Imports outpace exports as coverage ratio slips in Jan-Aug
• Phosphates exports rises at double-digits, autos and textiles lag
• Strong FDI and tourism inflows sustain external accounts balance

Foreign trade deficit expanded by 15.5% y/y in Jan-Aug to reach MAD 225.9bn, according to the monthly data by the Foreign Exchange Office. Imports growth of 8.4% y/y continues to outpace export increase of 3.8% and the export/import coverage ration worsened to 57.6% in the period, down from 60.2% in the same period of 2024.

Import growth was driven by finished equipment (+13%), consumer goods (+13.4%) and raw materials (+31.5%), while energy imports declined 6.2% due to lower oil prices. On the export side, phosphate products surged 21.1% and aeronautics grew 5.6%, partly offsetting declines in automobiles (-2.9%), textiles (-4.2%) and electronics (-6.8%).

Services trade remained a strong cushion, with exports up 9.2% and imports up 8.1%, pushing the services surplus to MAD 102bn (+10.3%). Travel receipts surged 14.3% to MAD 87.6bn, while Moroccans' spending on trips abroad also increased by9.0% to MAD 19.7bn. Remittances from Moroccans abroad moderated this year and dipped slightly to MAD 81.7bn (-0.6%), though still remaining a significant source of fx income. FDI inflows accelerated sharply, with net flows reaching MAD 23bn, up by impressive 47.6%. Conversely, Moroccan investments abroad contracted, generating a small net inflow of MAD 2.9bn.

Overall, the external position highlights a widening goods deficit offset by services, tourism, and FDI resilience. Looking forward, the pressure from weak industrial exports and growing import dependence may weigh on the current account, though sustained FDI and strong travel inflows could partly mitigate risks. For now, data imply no pressure on Morroco's fx peg, though the central bank remains very cautions on country's readiness for the free float transition. Bank Al-Magrib Governor Abdellatif Jouahri said last week that stability for businesses remains paramount, and any premature liberalization could expose the economy to disruptive volatility.

• High youth unemployment and online mobilization are fueling the largest unrest since the 2016-2017
• Govt pledges restraint but any further escalation poses threat to tourism and investment

Two people were killed in Lqliaa, near Agadir, after security forces opened fire when protesters tried to seize weapons from a gendarmerie post, marking the first fatalities in the rapidly escalating youth protests that started Saturday, local police confirmed. The movement, led by an anonymous online group called "GenZ 212," has spread from demands for healthcare and education reforms into widespread unrest across multiple cities, including Rabat, Tangier, Marrakech, and smaller towns in the Souss region.

Clashes intensified on Tuesday and Wednesday with shops looted, banks set ablaze, and police stations attacked, though some cities like Casablanca and Oujda saw peaceful marches calling for Prime Minister Aziz Akhannouch's resignation. The Interior Ministry reported over 280 injured (263 security forces and 23 civilians), while 409 arrests have been made, with nearly half facing trial. Youth unemployment at 35.8% has fueled the protests, which echo the Rif unrest of 2016-2017.

The government has pledged restraint but the lethal use of firearms and growing online mobilization-GenZ 212's Discord server surged from 3,000 to 130,000 members in a week-suggests Morocco may be entering a more volatile phase. If violence escalates, risks to tourism, investment, and political stability could grow, with the government under rising pressure to offer tangible social and economic concessions.

• Qatar receives NATO-like security guarantee from US

US President Donald Trump has signed an executive order officially promising to protect Qatar, according to the White House. Below is part of the exact text of the executive order:

(a) The United States shall regard any armed attack on the territory, sovereignty, or critical infrastructure of the State of Qatar as a threat to the peace and security of the United States.

(b) In the event of such an attack, the United States shall take all lawful and appropriate measures - including diplomatic, economic, and, if necessary, military - to defend the interests of the United States and of the State of Qatar and to restore peace and stability.

(c) The Secretary of War, in coordination with the Secretary of State and the Director of National Intelligence, shall maintain joint contingency planning with the State of Qatar to ensure a rapid and coordinated response to any foreign aggression against the State of Qatar.

This commitment comes after Israel carried out an airstrike on Hamas leadership in Doha on Sep 9. The strike targeted Hamas leaders but also killed a Qatari security officer and lower level Hamas members. Israel's PM Benjamin Netanyahu expressed regret for violating Qatari sovereignty and assured that Israel would not conduct such an attack again in the future.

Netanyahu made the apology during a phone call organized by Trump, who was present during the call. This apology was a condition for Qatar to resume its mediation efforts regarding a deal to end the war in Gaza and free hostages.

Naturally, Qatari officials welcomed Trump's executive order. Qatari media outlets and influential voices have welcomed the unprecedented US security guarantee as a historic move. Domestic media is portraying the executive order as a deterrent against further attacks and a diplomatic gain for Qatar, which has never before received such a sweeping protection pledge from the United States.

We note that this executive order is a rare and strong security guarantee to an Arab Gulf country that is not a NATO member, effectively elevating Qatar's strategic partnership with the US to a level similar to a NATO-style mutual defense commitment, but without the full legal obligations of NATO membership.

Qatar hosts the largest American military base in the region and plays a key role as a mediator in Middle East conflicts, including the Gaza war. The Al Udeid Air Base serves as the forward headquarters for US Central Command and hosts about 10,000 US military personnel.

• Rate moderates further, which we attribute to easing regional tensions
• Interbank liquidity is likely to remain tight over H2 because of strong lending activity
• SAMA cut interest rates in September as it follows closely FED's monetary policy

The average three-month Saudi Arabian Interbank Offered Rate (SAIBOR) moderated for second month in a row in August, easing to 5.40% from 5.45% in July, according to data released by the central bank (SAMA). The 3M rate reached a six-month high in June, which we attributed to the escalation between Israel and Iran during that month and the tighter domestic liquidity and we attribute the recent moderation to the gradual improvement in the security of the region. The rate is likely to fall more notably in September as SAMA cut interest rates by 25bps. The Saudi currency is pegged to the USD and SAMA follows the US Federal Reserve's decisions, even though Saudi inflation has been below that of the US in the past three years. According to analysts, FED may implement more rate cuts during Q4.

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Higher interest rates have not cooled investments and consumption in the kingdom, which remains supported by looser fiscal policy and massive public infrastructure projects. Looking at H2 2025, we expect the interbank liquidity to remain tight. Saudi Arabia's banking system has recorded another year of strong loan growth that outpaced the increase in deposits, thus keeping liquidity tight and pushing banks to look for additional funding sources. Further, we expect that the weak oil prices and the financing of the wider fiscal deficit will keep the interbank money rates elevated.

• Widening due to rising foreign liabilities, foreign assets meanwhile fall on the month
• Foreign assets now account for 8.2% of banks' total assets and 13.9% of total deposits
• Meanwhile, SAMA's net foreign assets were sizeable USD 433bn at end-month

The deficit in the banks' net foreign assets widened to an all-time high SAR 158.3bn (USD 42.2bn) as of end-August from SAR 144.6bn recorded one month earlier, according to data released by the central bank (SAMA). The deficit recorded in August is not only the largest in the series history, but it also marks the 13th consecutive month when the banks' NFAs were in a liability position. We attribute the reversal in the banks' NFA position to the strong demand for funds in the kingdom as Vision 2030 projects roll out. The m/m widening was due to a relatively strong increase in foreign liabilities (+ SAR 11.1bn) and a slight drop in foreign assets (-SAR 2.7bn). The increase in the liabilities was mostly due to funds owed to foreign banks. We remind that credit growth in Saudi Arabia has outpaced the growth in deposits for a second year in a row, leading to tighter liquidity and encouraging the commercial banks to look for additional funds from foreign banks, leading to growing external liabilities. The banks' NFAs peaked in April 2023 and have been trending downwards since then on the back of rising foreign liabilities, especially to other creditors and foreign banks. We expect that the weak oil prices will put pressure on the banks' foreign assets and will keep the NFAs in deficit position, possibly leading to even wider deficit this year. The foreign assets are equal to 8.2% of the banks' total assets and 13.9% of their total deposits.

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Meanwhile, the net foreign assets of SAMA remain sizeable, recording a net asset position of around USD 433 and accounting for about 40% of GDP. SAMA's net foreign assets are traditionally boosted by the quarterly dividend payments by Saudi Aramco, which will be cut by 30% to USD 85bn this year due to financial pressures from high payouts and weaker oil prices.

• Large remittance outflows are structural feature of kingdom's Current Account
• Remittance outflows rose by sharp 18% y/y to USD 43bn in Jan-Aug

The personal transfer payments fell by sharp 15.6% m/m to USD 4.8bn in August, following a strong 7.1% m/m increase in the preceding month, according to figures released by SAMA. Remittances from expats living in Saudi Arabia account for two thirds of the payments, the rest are payments made by Saudi nationals. Coming off a high base, the monthly payment in August is the second lowest this year and probably reflects some seasonal effects. While the weaker oil prices are likely to cool some of the large investment projects, which rely heavily on expat construction workers, there are plenty of massive infrastructure projects that will keep demand for this type of labour strong. The large remittance outflows are a structural feature of Saudi Arabia's Current Account as the country relies heavily on foreign workers, especially in the construction sector. The government has deployed measures to encourage the employment of Saudis and to reduce the reliance of foreign workers, and these measures are gradually having effect on the labour market, but we do not expect a significant decline in foreign employment at least over the medium term.

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Remittance outflows rose by a strong 18% y/y to USD 42.5bn in Jan-Aug. This sharp increase came on top of the 13% y/y growth recorded in 2024, which pushed remittance outflows to USD 57bn last year, accounting for 13% of SAMA's foreign reserves and for about 2% of full-year GDP. The personal transfer payments account for about 45% of Saudi banks' sales of hard currency for specific purposes, with the remaining sales allocated to import financing (around 25%) and foreign contractors (around 30%). The share of personal transfer payments in the total sales of hard currency (including third parties such as foreign banks and other Saudi customers), is around 7%.

Saudi handicrafts sector valued at USD 405mln, new paper shows (Zawya)

Saudis seek feedback on plan to open stock market to foreigners (AGBI)

Bahri places USD 200mn order with Mena's largest shipyard (AGBI)

Europe's Investindustrial buys Saudi food producer (AGBI)

QNB's Ezbank granted licence in Saudi Arabia (AGBI)

Saudi POS transactions climb 3% to USD 3.4bn on strong consumer spending (Arab News)

Saudi Arabia enforces new Saudization and worker registration rules for tourism sector (Arabian News)

• BFA shares surge 50% in two sessions after IPO

The timetable for the next privatization to be carried out though the stock exchange is still unclear, Álvaro Fernão, president of the Institute for the Management of State Assets and Shareholdings (IGAPE), speaking to reporters on the sidelines of the "Ring the Bell" ceremony marking the listing of Banco de Fomento Angola (BFA). There are two to three more privatizations soon to be announced, though the final calendar is pending approval, he said. The privatisation program, PROPRIV, runs until 2026 and includes the divestment of dozens of strategic assets through IPOs, tenders, and auctions. Major companies slated for privatization include Sonangol, Unitel, Standard Bank, and TAAG. Sonangol's privatization, deemed the most complex, is planned for 2026.

Last week, a 29.75% stake was successfully floated on Bodiva for AOA 220.9bn (USD 240mn). The offer was oversubscribed five times, while share prices jumped 50% once the office trade on the stock market started. Strong investor appetite in BFA boosts confidence for upcoming sales. To date, 115 privatizations worth AOA 1.149tn (USD 1.25bn) have been contracted under PROPRIV, of which the state has received AOA 641.5bn (USD 700mn), or only 50%. However, only AOA 245.1bn came in direct cash, while AOA 508.4bn.

• Licensing expands pool of intermediaries to 11 from 8 in September
• New entrants expected to boost transparency and market activity
• Formal securities trading continues to gain momentum since July

The Ethiopian Capital Market Authority (ECMA) granted three new licences on Oct 1, to service providers in the country's emerging securities sector, marking another step in the development of Ethiopia's nascent capital market. First Addis Investment Bank received an investment banking licence, while Ignite Capital and Zuri Capital were approved as securities investment advisers. The approvals raised the total number of licensed capital market service providers to 11, up from eight in September. The move followed the launch of government securities trading on the Ethiopian Securities Exchange (ESX) in Jul, which marked the start of formal securities trading in the country. ECMA Director General Hana Tehelku said the licences reflected the authority's commitment to an inclusive, transparent, and resilient financial system, urging the new entrants to play an active role in developing the market. Since March 2024, ECMA gradually opened the sector by licensing investment advisers, brokers, dealers, and investment banks.

Licensed providers are required to meet capital adequacy, governance, and compliance standards under ECMA's 2024 directive on capital market service providers. Only licensed firms can apply for ESX membership, enabling them to conduct trading, brokerage, and underwriting activities. Major banks, including Commercial Bank of Ethiopia and Wegagen Bank, already secured investment banking licences through subsidiaries, with other institutions preparing applications for exchange membership. Established in 2021 as part of financial sector liberalisation, ECMA licensed ESX in December 2024, and Prime Minister Abiy Ahmed inaugurated the exchange in January 2025. We note that while corporate bonds and equities were expected to be listed in the coming years, low private-sector participation and limited investor awareness remained hurdles to market depth and liquidity.

• Finance ministry released second-quarter Treasury Bills auction calendar worth ETB 243.5bn
• Weighted average 90-day T-bill yield fell to 15.0% in August, improving market liquidity
• Auctions open to commercial banks, insurance firms, and pension funds via Ethiopian Securities Exchange

The Ministry of Finance announced a new Treasury Bills auction calendar covering the second quarter of the 2025/26 financial year, marking a key step in ongoing public finance reforms aimed at modernizing debt management and promoting market-based deficit financing. The calendar provides clear visibility of upcoming Treasury Bills auctions and enhances predictability for market participants, supporting investor confidence in Ethiopia's domestic debt market. The calendar outlined plans to offer ETB 243.5bn in Treasury Bills through biweekly auctions scheduled from Oct 1 to Dec 24. The auctions remained open to a broad range of local investors, including commercial banks, insurance companies, and pension funds, through the Ethiopian Securities Exchange (ECX). By widening access, the Ministry aimed to encourage efficient resource allocation while creating secure investment opportunities that support economic development.

Treasury Bills, short-term government securities with maturities under one year, continued to serve as a primary source of domestic financing. In Aug, the weighted average yield on 90-day T-bills fell to 15.0% from 17.6% in July, reflecting improved liquidity conditions in the domestic market, according to the National Bank of Ethiopia's Monetary Policy Committee. The decline in yields indicated growing investor confidence and the effectiveness of ongoing debt management reforms. The new T-Bill calendar included maturities of 28, 91, 182, and 364 days, offering flexibility for different investor needs. This initiative aligned with Ethiopia's broader strategy to deepen its domestic debt market, reduce reliance on central bank financing, and support macroeconomic stability.

We recall that the Ministry of Finance reported that Ethiopia's public-sector domestic debt stock stood at ETB 2.5tn at end-June, according to its inaugural domestic debt bulletin. Long-term Treasury bonds accounted for the largest share at 80%, while medium-term bonds and Treasury bills represented about 8% and 10% respectively. The government raised ETB 111.1bn through four Treasury-bill auctions during Jul-Aug against a plan of ETB 103.4bn. Gross issuance refinanced ETB 78.2bn of maturing bills and rolled over ETB 9.0bn, leaving net issuance at ETB 23.9bn (14% of the ETB 172.9bn annual net target). Investor appetite remained firm with total bids of ETB 164.7bn (159% of offer), producing an average subscription of 107%.

• Govt leaves pump prices unchanged while jet fuel rose to ETB 120.10/l, up 9.62% from ETB 109.56
• Combined 30% VAT + excise duty continues to apply to petroleum in FY2025/26, keeping upward pressure on consumer prices

The Ministry of Trade and Regional Integration announced that retail prices for gasoline, white diesel, kerosene, light black diesel and heavy black diesel remained unchanged for the review period, while it set jet fuel in Addis Ababa at ETB 120.10 per litre, effective from the date of the directive. Publicly available data showed that the last publicly listed jet fuel price was ETB 109.56 per litre, making the ETB 120.10 revision a ETB 10.54 (9.62%) increase from that level. This comparison used the most recent ministry-listed retail figure before the adjustment. As of Mar 23, the government set diesel at ETB 112.67 per liter and kerosene at ETB 107.93 per liter amid widespread shortages, following a previous increase in January when diesel surpassed ETB 100 per liter.

We recall that according to local media reports, the Ministry of Finance recently implemented a combined 30% tax on petroleum for FY2025/26 (15% VAT + 15% excise), which analysts said had already contributed to large retail rises since mid-2022 and continued to amplify consumer price pressures. Headline inflation stood at about 13.7% in August, placing the government's pricing choices squarely in a fiscal-inflation trade-off. Ethiopia operates a routine monthly pricing mechanism since 2022 that linked domestic retail rates to international benchmarks and exchange-rate movements. The ministry said the review formed part of that framework. Policymakers earlier phased down subsidies to reduce the fiscal burden, which analysts said had pushed diesel and gasoline prices materially higher since mid-2022. Transport operators have seen no immediate pump-fuel cost change, which supports short-term fare stability. Fuel accounts for part of the "Housing and utilities" component within the non-food CPI category, which has a 16.8% weight in Ethiopia's overall consumer price index. Rising black-market prices remain a significant risk which requires further policy interventions.

• ExxonMobil is expected to sign an exploration agreement in October
• Deal could cover up to six offshore blocks near the Republic of Congo
• Gabon's oil minister confirmed international partners' renewed interest

ExxonMobil is set to return to Gabon's oil sector with an exploration agreement expected to be signed this month, according to a recent S&P report that cited three anonymous sources familiar with the matter. The deal could involve up to six offshore exploration blocks near the Republic of Congo, but is still under negotiation and will take the form of a memorandum of understanding. Gabon's oil minister Sosthene Nguema Nguema confirmed at the ongoing Africa Energy Week in Cape Town that international partners are showing renewed interest in the country. He said a major deal would be concluded within two weeks. One S&P source said the Gabonese government is pushing for an aggressive exploration program, starting with seismic studies and leading to the drilling of a first well within 18 months.

ExxonMobil's reentry will mark a potential boost for Gabon, which has struggled with declining crude production. Output fell from a peak of 370,000 bpd in 1997 to around 240,000 bpd in Aug 2025, according to S&P Global data. In the meantime, the state-owned Gabon Oil Company (GOC) has expanded its role by acquiring key assets including Assala Energy and holdings from UK-based Tullow Oil. At the Cape Town conference, senior Gabonese officials outlined their strategy to acquire producing assets being sold by private owners while promoting offshore exploration. They noted that 72% of Gabon's oil acreage remains unexplored.

• Democratic Union of Builders (UDB) won 55 of 145 seats
• Former ruling PDG secured only three seats, plus four jointly with UDB

Gabon's ruling party, the Democratic Union of Builders (UDB), secured the most seats in the first round of legislative elections that took place on Saturday (Sep 27). This is according to provisional results on Wednesday from the Interior Ministry. Founded in July by president Brice Clotaire Oligui Nguema, the UDB won 55 of 145 seats in the national assembly. In practice, the national assembly holds limited powers after a new constitution was adopted last year by referendum. Under Gabon's new presidential system, parliament cannot dismiss the government. The former ruling Gabonese Democratic Party (PDG) took only three seats during the elections, though the two parties ran on a joint ticket in some constituencies and managed to secure four more seats. A second round of elections is scheduled for Oct 11 in 77 constituencies where no candidate gained an outright majority.

• Mahama says outcome of talks is important for Ghana's trade prospects
• President says lifting of US visa restrictions was achieved through diplomatic engagement and at no financing cost
• President assures deal with US will not turn country into "dumping ground" for deportees

President John Mahama said that the government is in talks with the US on the 15% tariff imposed on Ghanaian imports, as well as the renewal of the African Growth and Opportunity Act (AGOA). Speaking to reporters on Oct 1, he said the outcome of the talks will be key for the country's trade prospects and urged Ghana's envoys to check on the progress.

Commenting on the recent US decision to lift visa restrictions for Ghanaian nationals, Mahama said it was achieved solely through diplomatic engagement and at no financial cost, thus rejecting recent speculation. He also urged Ghanaians travelling abroad to respect the conditions of their visas so as not to affect the broader population.

As for the deal to receive US deportees, Mahama assured that it would not undermine Ghana's security and stability and would not turn in into "a dumping ground" for deportees. He reiterated that the deal was motivated by humanitarian reasons as the government wanted to make sure the West Africans can return safely to their home countries.

CSOs ready to press Mahama for definition of success in galamsey fight - Ken Ashigbey (Joy FM)

Virtual Asset Service Providers Bill makes progress towards parliament - BoG (Joy FM)

Next NPP gov't will complete Agenda 111 - Bawumia (Citi Newsroom)

Ghana won't become a dumping ground for deportees - Mahama (Citi Newsroom)

Mahama clarifies: U.S. Visa restrictions reversal came at no financial cost (Citi Newsroom)

Ken Ofori-Atta who has been placed on Interpol red notice by OSP as a wanted man spotted in Washington DC (Daily Graphic)

TEWU suspends strike after progress in negotiations (Starr FM)

Mahama inaugurates 18-member joint cyber security committee to strengthen digital safety (Starr FM)

• Continued disinflation driven mainly by slower food inflation
• On the other hand, higher charcoal and fuel prices have upward effect
• Disinflation expected to continue but possibly at slower pace

The CPI inflation slowed down to 9.4% y/y in September from 11.5% y/y August, entering the single-digit territory for the first time in four years and hitting the lowest level since July 2021. The deceleration was mainly driven by the food category where prices rose by 11.0% y/y after 14.8% y/y in August. Alcoholic beverages and tobacco, and clothing and footwear also had a more pronounced downward impact on the headline print. At the same time, housing and utilities prices grew at a faster pace and transport prices decreased at a slower pace, which is due to the rise in charcoal and automotive fuel prices. The latter came as a result of the increase in energy levies in July, as well as the recent cedi weakening. In m/m terms, the headline CPI rose by 0.9% after decreasing by 1.3% m/m in August with both food and non-food prices picking up, driven by the rise in prices of some fresh foods, fuels, charcoal and secondary education fees.

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The disinflation process is expected to continue in the months ahead although it might slow as a result of the recent pressure on the cedi and the easing of the monetary policy. The central bank has cut the policy rate by a total of 650bps this year and said after the MPC meeting last month that expects inflation to continue to ease in the near term and enter the target range of 6-10% by the end of the year. This has already happened. The central bank admitted that there are some upside risks from the potential hike in utility tariffs (the regulator hiked tariffs by just 1% as of October), but noted that the maintenance of an appropriate monetary policy stance, strong sterilisation efforts, ongoing fiscal consolidation, and adequate reserve buffers should help sustain the disinflation process.

• Investment will be spread over ten years
• Strategy aims to make sector more competitive, sustainable and inclusive

The agriculture ministry announced a new development strategy for the palm oil sector, which envisages investment of XOF 245.9bn (USD 440mn) over the next 10 years. The plan was developed by the Rubber-Palm Oil-Coconut Council (CHPC) and has five strategic pillars. Of the planned investment, 61% will go toward improving productivity in village plantations. The other priorities include strengthening competitiveness, improving marketing, promoting sustainability and developing financing mechanisms for farmers. The challenges facing the sector were said to include aging plantations, tougher international standards on traceability and sustainability, and competition from Asian imports, and the strategy aims to make it more competitive, sustainable and inclusive.

The country produces over 500,000 tonnes of palm oil annually which makes it the second largest producer in Africa and the seventh largest in the world. About 25% of the crude palm oil is exported to regional markets such as Mali, Burkina Faso, Niger, Ghana, and Nigeria.

• Balanced resources and expenses raised by 13.1% to XOF 15,229bn
• Budget is based on GDP growth projection of 6.7% for 2026

The government approved the draft 2026 budget with balanced resources and expenses of XOF 17,350.2bn, up 13.1% from the XOF 15,229.2bn in 2025. A statement released after the cabinet meeting on Oct 1 read that the budget is based on a GDP growth projection of 6.7% for 2026, which is more optimistic than the IMF and EBRD which forecast growth of 6.4% for 2026.

The government said the budget was prepared in a "dynamic" economic context marked by the successful implementation of the National Development Plan (NDP) 2021-2025 and the implementation of structural reforms under the IMF programme. The statement read further that the fiscal policy in 2026 would be focused on improved mobilisation of domestic resources, control of operating costs and consolidation of capital expenditure, as well as strengthening social and environmental protection spending. No more details were revealed but more will probably be known when the budget is debated in parliament.

• Price is set at XOF 2,800 per kg equivalent to about USD 5
• Price is now higher than price offered in Ghana

President Alassane Ouattara officially launched the new cocoa season on Oct 1 and announced an increase in the farm-gate cocoa price to XOF 2,800 per kg, higher than expected XOF 2,500. The new price is the highest paid on record and is 27.3% higher than the XOF 2,200 for the mid-crop of the 2024/25 season as well as 55.6% higher than the XOF 1,800 for the main crop of 2024/25. We note that the season starts with the main crop which runs from October to March while the smaller crop (the mid-crop) runs from April to September.

Previously sources had told Reuters that the price would be raised to XOF 2,500 as this was the best price that can be offered given the difficult sales in recent months. According to exporters, the CCC has sold 1.15mn tonnes of cocoa export contracts so far, based on a forecast of 1.2mn tonnes, and down by 11.5% y/y. The cocoa crop is expected to drop again in the coming season due to unfavourable weather and plant diseases. Smuggling has also been a factor fuelled by the differences in prices in countries in the region. The new Ivorian price is equivalent to about USD 5.0 per kg which is higher than the USD 4.2 price in Ghana and will hopefully discourage smuggling. However, prices in other regional producers such as Cameroon, where the market is liberalised, remain higher.

Three-quarters of firms fail to pay corporate tax (Business Daily)

Eight banks defy CBK in push to lower cost of loans (Business Daily)

Milking Kenyans dry: Sh17bn payout for shady deals (Nation)

Haiti's deadly gamble: Little to show as Kenyan-led mission is replaced by UN (The Standard)

ICPAK claims auditors targeted for exposing financial malpractices (The Star)

• to redirect recovery plan resources toward priority projects
• envisages greater reliance on PPPs, diaspora funds, sukuk and crowdfunding to reduce external borrowing
• meeting also highlights education, agriculture, health and investment promotion initiatives

The cabinet has endorsed a new approach to financing national projects, emphasizing the use of domestic resources and innovative funding mechanisms, according to the communique from the latest cabinet meeting. Under the plan, resources generated through the Economic and Social Recovery Plan will be redirected toward priority programs, with budget allocations decided through tighter arbitration and programming.

The government will also increase reliance on public-private partnerships, diaspora investment, and local savings mobilization through existing structures such as FONSIS, CDC, FONGIP, and IPRES. Additional tools like sukuk, waqf, and crowdfunding platforms are expected to be deployed to finance infrastructure and social initiatives in education, health, and territorial development. The prime minister highlighted that these measures are designed to reduce dependence on external borrowing while ensuring that funds are directed to projects with strong economic returns.

The cabinet session also reviewed preparations for the new school year, stressing investments in modern classrooms and the regulation of school fees. In agriculture, authorities pledged to strengthen seed production, revive community farming programs, and promote local consumption campaigns.

Other topics included Senegal's recent participation in the UN General Assembly, health measures against Rift Valley fever, and initiatives for breast cancer awareness. The president further announced the upcoming "Invest in Senegal" forum, which will bring together government representatives and investors next week in Dakar.

• September domestic sales hit highest monthly level since September 2015
• Passenger car sales are also the strongest since October 2014
• Vehicle exports rise sharply to 38,772 units, up 32.9% y/y in September

The new domestic vehicle market extended its strong run in September, with total domestic sales rising 24.3% y/y to 54,700 units, according to the latest naamsa | The Automotive Business Council report released on Thursday (Oct 2). This marked the industry's highest monthly sales volume since September 2015, underscoring resilient demand despite restrictive borrowing costs and muted medium-term economic growth.

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Passenger vehicle sales led the expansion, reaching 38,603 units, up 28.0% y/y and the segment's strongest performance since October 2014. Car rental companies played a significant role, accounting for just over 20% of passenger sales. Light commercial vehicles, including bakkies and minibuses, rose 19.7% y/y to 13,078 units. Medium commercial vehicle sales eased 1.9% y/y to 767 units, while heavy trucks and buses gained 5.9% y/y, with 2,252 units sold.

Vehicle exports surprised to the upside, rising 32.9% y/y to 38,772 units in September and lifting year-to-date exports 6.0% y/y. The industry's performance came despite continued headwinds from US automotive tariffs and global supply chain shifts. Supportive factors included a stronger rand, subdued vehicle price inflation, and competitive pricing driven by greater model diversity, according to naamsa.

The industry organisation noted that easing inflation (3.3% y/y in August) has helped sustain affordability for households, particularly in entry-level segments, though consumer confidence weakened in Q3. The report was released during the 2025 SA Auto Week in Gqeberha, where naamsa marked its 90th anniv. ersary in the Eastern Cape, the hub of South Africa's automotive industry

• Fuel prices will rise only modestly in October
• Low base will support fuel price inflation until year-end

The retail prices of both grades of petrol will rise marginally in October and diesel prices will decline, according to the new regulated prices effective on Wednesday (Oct 1). In our estimates, the average petrol price will rise by only 0.2% this month to just over ZAR 21/l. Diesel prices, meanwhile have been cut by ZAR 8-10c/l depending on the grade. Even so, we forecast that the marginal price hike in petrol prices will translate to a 3.5% y/y increase in the petrol price index largely attributable to the low base from last year. This means that fuel prices will start to exert upside pressure on the headline CPI index in October following more than a year of easing. We expect to see fuel prices adding 1pps to headline CPI in September and 2pps in October. The renewed pressure from food prices will also persist until the end of the year and the combination of food and fuel inflation is likely to push the CPI print closer to 4.0% y/y at the end of the year. These pressures will likely tie the hands of the central bank which has already paused the easing cycle at its rate meeting in September in pursuit of a lower 3.0% inflation target.

The enemy within: Eskom fleeced of R20bn in three years (Business Day)

Industrial users warn high Eskom tariffs threaten recovery (Business Day)

Afrikaner leaders' private US dinner raises trade diplomacy concerns (Business Day)

SA's big four poultry giants face antitrust probe (Business Day)

PA withdraws threat to pull out of GNU (Business Day)

DA blames ANC for loss of formal jobs (Business Day)

Some SA exports to US take strain as hope grows for better trade terms (News24)

Rand hits best level in a year after US jobs shocker (News24)

eFiling profile hijackings report urges Sarb to look at specific banks (Moneyweb)

Madlanga Commission to resume hearings on 13 October (Eyewitness News)

DA ahead of ANC in internal party polls as Zille declares water a top Joburg priority (Daily Maverick)

Julius Malema's firearm verdict and the EFF's fork in the road (Daily Maverick)

Whistleblower sparks police raids as investigations into Cape Town's R1.6 billion tender fraud intensify (Daily Maverick)

Ford retrenchments in South Africa tied to UK tax shift, lower volumes (Daily Maverick)

• Sentencing has been set for Jan 23, 2026
• EFF leader vowed to appeal before the High Court and the Constitutional Court if needed

EFF leader Julius Malema has been found guilty in the East London Magistrate's Court of discharging a rifle at a 2018 rally. Addressing supporters outside court, Malema said he would appeal "all the way to the Constitutional Court," insisting the judgment was politically and racially motivated. While his co-accused, security head Adriaan Snyman, was acquitted on all charges, Malema argued the case was targeted at him personally. The court will pronounce the sentencing has been on Jan 23, 2026. The crime carries a maximum penalty of 15 years in prison. If Malema is sentenced to more than 12 months in jail, he risks losing his seat in parliament. Malema appealed to EFF members not to be discouraged by the attempts to undermine the party and urged them to focus on strengthening branches ahead of local elections in 2026. The judgement comes weeks after the Malema was found guilty of hate speech in a separate case, adding further pressure on the outspoken opposition leader.

• Amount sold exceeds target by 176%
• Yields on 2-year, 15-year bonds flat, yield on 5-year bond rises
• With this auction, treasuries sold this FY reach 42% of plan

The government sold UGX 2,737bn T-bonds at an auction on Oct 1, exceeding significantly the UGX 990bn target as the demand strengthened with bids totalling UGX 3,174bn, translating into a subscription rate of 3.2, up from 2.1 a month earlier. The 2-year and 15-year bonds were sold at unchanged yields but the yield on the 5-year bond rose by 70bps compared to the previous auction of these tenors in August.

With the latest auction, the total issuance this fiscal year so far (Jul 1-Jun 30) reached UGX 9.0tn, which is 42% of the issuance plan which is UGX 21.4tn. This suggests that the issuance plan might be revised up similarly to 2024/25. The initial issuance plan for 2024/25 was UGX 12.6tn before it was raised to UGX 21.3tn, only to be exceeded as the total issuance reached UGX 25.5tn, with the government resorting mainly to domestic borrowing to compensate for lower-than-expected external funding. The government expects more external financing this fiscal year following the WB's decision to unfreeze lending to the country.

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• ZDA targets transformative investments across agriculture, mining, energy, manufacturing, and services

Zambia Development Agency (ZDA) signed two memoranda of understanding (MoUs) with the Shanghai Cooperation Organisation (SCO) Guangdong-Hong Kong-Macao Development Committee and the Southern African Institute for Policy and Research (SAIPAR), aimed at boosting trade, investment, and evidence-based policymaking. ZDA Director General Albert Halwampa said the partnerships could unlock projects exceeding USD 1bn, supporting job creation, food security, and sustainable economic growth. The MoU with SCO Guangdong-Hong Kong-Macao Development Committee focused on agriculture, mining, energy, manufacturing, services, and cultural, scientific, and tourism exchanges. Halwampa highlighted Zambia's strategic role as a regional hub, citing key trade corridors such as the Lobito Corridor that enhance connectivity to global markets. SCO Director Wang Ruicai pledged strong support, noting that Zambia offers opportunities for innovation and sustainable development through advanced technology, investment, and expertise. A joint working group and annual high-level consultation mechanism were established to ensure follow-through on commitments. The second MoU with SAIPAR emphasized evidence-based policymaking as a driver of economic transformation. Joint initiatives focus on research, investment promotion, agricultural development, and business growth, particularly for small and medium enterprises (SMEs).

• Platform aims to increase intra-group trade from 5% to 25% of total transactions
• IDC subsidiaries generated ZMW 40bn in annual revenues in 2024, potential ZMW 10bn retained internally

State-owned investment arm, the Industrial Development Corporation (IDC) launched the IDC Intra-Group Marketplace, a digital platform designed to boost trade, transparency, and collaboration among its 36 subsidiaries and investee companies. IDC Chief Executive Officer Cornwell Muleya said the platform enabled real-time transactions, listing of goods and services, and quotation requests. Muleya noted that IDC subsidiaries generated ZMW 45bn in annual revenues in 2023 and ZMW 40bn in 2024, yet intra-group trade accounted for less than five percent of total transactions. He projected that increasing this share to 25% could retain ZMW 10bn within the group. Muleya highlighted past challenges including low competitiveness, quality issues, pricing inefficiencies, and delays, which had limited internal trade and value creation. The platform aims to strengthen domestic value chains, enhance enterprise competitiveness, and ensure subsidiaries grew together.

Finance and National Planning Minister Situmbeko Musokotwane, represented by Director Mordsen Chibuye, described the initiative as a strategic milestone to reinforce state-owned enterprises, promote intergroup trade, and expand IDC's economic impact. He noted that the IDC group managed assets exceeding ZMW 300bn and received over ZMW 1bn in dividends since inception. The launch featured exhibitions by subsidiaries and participation from sponsors including ZICB, Zamtel, ZSIC Life, Zanaco, Infratel, and Zambia Daily Mail.

We recall that in July, IDC unveiled a strategic plan spanning 2024 to 2033 targeting significant industrial growth and economic expansion. The institution announced that the goal is to establish a ZMW 200mn Wealth Fund within this period while increasing subsidiary dividends to ZMW 7bn by 2033. IDC is a government-owned investment holding company incorporated in January 2014 to catalyze Zambia's industrialisation and co-invest alongside the private sector to lower project risk. Fully owned by the Government through the Ministry of Finance and National Planning, IDC manages assets across energy, agriculture, mining, manufacturing, tourism, and media. IDC supported over 20,000 jobs, and through its financial services arm, Indo Zambia Bank, total assets rose 22.97% to ZMW 20.85bn with net profit after tax up 19.82% to ZMW 724mn in 2024.

• Govt targets ZMW 21.62bn net domestic borrowing in 2026 (2.3% of GDP)
• Banks were already heavily exposed, non-residents held 25% of domestic debt in 2024
• Public investment currently relies on 2.6% of GDP in foreign financing

World Bank Senior Country Economist for Zambia, Albert Pijuan Sala, warned that Zambia's 2026 budget faced risks if domestic debt financing did not materialise. Speaking during the PwC Budget Bulletin following the Finance Minister's presentation of the 2026 national budget, Sala pointed to the government's plan to raise ZMW 21.62bn (2.3% of GDP) through net domestic borrowing. He noted that in 2024 financing conditions were tight and auctions were undersubscribed. Banks were already significantly exposed, while non-resident investors accounted for 25% of domestic debt holdings, their likely limit given risk-adjusted returns.

Sala commended the government's intention to raise public investment as a share of GDP in 2026. However, he stressed that allocations were skewed by transfers to the Food Reserve Agency (FRA), which did not qualify as investment. Excluding FRA, foreign-financed investment accounted for just 2.6% of GDP. He warned that revenue shortfalls or financing constraints could quickly erode capital spending. This, he said, would weaken future growth prospects and undermine domestic revenue mobilisation. He emphasised that the credibility of Zambia's 2026 budget depended on sustaining investor appetite for domestic securities and securing projected external disbursements. He underlined that shocks to financing or weaker-than-expected revenue performance would compromise investment execution and threaten fiscal stability. Sala concluded that unresolved domestic debt financing presented the most immediate risk to the 2026 budget, reinforcing concerns over Zambia's medium-term growth outlook.

We recall that recently, Finance Minister Situmbeko Musokotwane presented the draft 2026 national budget to parliament. In the FY 2026, the budget proposes total expenditure of ZMW 253.1bn (27.4% of GDP), a notable increase from the 2025 budget of ZMW 217.1bn, financed by improved domestic revenues and controlled borrowing. The minister noted that the budget would be financed by domestic revenues of ZMW 206.5bn (81.6% of the budget or 22.3% of GDP) and grants of ZMW 12.1bn (4.8% of the budget). The resulting deficit of ZMW 34.5bn (3.7% of GDP) will be financed through ZMW 21.6bn in domestic borrowing (2.3% of GDP) and ZMW 12.9bn in external borrowing (1.4% of GDP) although no new external loans will be contracted during the FY with external funds to be received as disbursements from existing loans, according to the recently released annual borrowing plan for FY 2026.