• Scatec's Obelisk Solar was granted golden license for USD 600mn solar project
• Futurefert for Fertilizer and Chemical Industries was granted golden license for new USD 40mn project

Egypt has awarded "golden licenses" to two companies for their projects in the country, according to a cabinet statement. Scatec's Obelisk Solar was granted a golden license for its USD 600mn solar project that aims to deliver 1 GW of renewable energy and a 200 MWh battery storage system. The first 500 MW are expected to be added to the national grid in Feb 2026 and the remaining 500 MW are expected in Aug 2026. Separately, Futurefert for Fertilizer and Chemical Industries was granted a golden license for its new fertilizer project worth USD 40mn. The facility will focus on the production of potash fertilisers, phosphate fertilisers, inorganic acids, and compound fertilisers. The first phase is expected to begin operations in January 2026 and will create 300 direct jobs.

• More than 54% of its components will be locally sourced with 40% of production set for export

Nissan Egypt has signed a USD 45mn contract to produce a third model in the country, with over 54% of its components sourced locally, according to a statement released by the cabinet on Wednesday. The company aims to manufacture 10,000 units of the new model for the local market and 7,000 units for export, provided the model is included under the umbrella of Egypt's Automotive Industry Development Strategy.

As part of its expansion efforts, Nissan will also invest an additional USD 2mn to increase production across its three models. To meet local demand and export goals, Nissan targets an annual output of over 30,000 cars by 2025. Nissan Egypt has already exported more than 16,000 units of its locally assembled Sunny model and plans to increase exports by 50% in the current fiscal year compared to 2023. To date, the company has generated over USD 150mn in export revenue and is focused on further increasing dollar inflows through expanded export operations.

• Last week, Egypt allocated EGP 10bn for settling debts to pharma sector
• Meds price hikes are set to continue, with prices of around 100 meds per month

Government arrears owed to pharma companies have reached EGP 50bn (USD 1mn), according to the pharma division of the Egyptian chambers of commerce. Despite the mounting debts, the firms continue to supply meds under existing agreements with the Unified Procurement Authority to keep hospitals stocked, according to the head of the division, Ali Auf. He also noted that while the sector was included in the government's low-interest financing initiative, which offers loans at a 15% interest rate for manufacturers, the pharma firms have yet to receive the soft loans carrying interest rates of 5-7% that they were told would be provided to them in order to help them recover to pre-crisis production levels.

Data Download

Last week, PM Madbouly said the government had allocated EGP 10bn to settle "significant" portion of its debt to the pharma sector. The money will be paid over the next three weeks and PM Madbouly said the government was committed to settling all its debts to the sector. Medical cost increases are set to continue, which affects around 100 medical products per month. The increases will be incremental and targeted (lesser for chronic illness, larger for non-chronic meds), according to Ali Auf.

Egyptian government dues owed to pharma firms hit EGP 50bn (Egypt Business)

Criminal Court reaffirms Muslim Brotherhood status as a terrorist organization for five years (Ahram)

Egypt, US FMs discuss rapid developments in Syria and Gaza's potential ceasefire (Ahram)

Egypt, Russia FMs discuss escalations in north Syria (Ahram)

Developing Egypt priority industrial sectors requires EGP 7.7bn loan: Minister El-Wazir (Ahram)

Halliburton prepares 3 deep-water wells in Egypt for natural gas production by H1 2025 (Zawya)

EGX Announces Results of United Bank IPO (Sada Elbalad)

USD 100mn feed factory in Egypt discussed with Chinese company New Hope (Egypt Today)

Finance Min. unveils plans to enhance investment climate, tax reforms (Egypt Today)

Egyptian Cabinet approves vision to regulate automotive market by 2025 (Egypt Today)

Nissan Egypt to invest USD 45mn to expand local production, increase exports (Egypt Today)

• More details will be released next week

The government will reveal a plan next week to list three or four military-owned companies on the local bourse (EGX), PM Madbouly said at this week cabinet meeting. The government will actually release the privatization plan and targets for the coming period next week, which will cover companies in the banking, industry, and pharma manufacturing among others, Madbouly said.

The potential listing of 3-4 military-owned companies on the EGX follows the very successful IPO of United Bank, which was covered 6 times. United Bank, which was fully owned by the central bank, sold a 30% stake, raising EGP 4.6bn (USD 92mn). The IPO attracted strong interest from both institutional and retail investors, pointing towards strong demand for fresh government offerings.

• Authorities think move simplifies business processes

Abu Dhabi is creating a centralised business registry authority to simplify business processes, according to news reports. The Abu Dhabi Registration Authority (ADRA) will be the single point for business registration and will form part of Abu Dhabi's Department of Economic Development (ADDED), which has a central role in streamlining government strategy to diversify the economy, attract foreign investment and develop local businesses.

The authorities also hope that centralising Abu Dhabi's business registration processes will ensure compliance with UAE and international regulations.

• Credit to private sector rises for 34th consecutive month
• Broadest monetary aggregate rises 16% y/y but this does not lead to higher inflation

Credit to the private sector increased 7% y/y to AED 1.3tn (USD 361bn) in August, according to the central bank. That was the 34th consecutive y/y increase. We expect credit to the private sector to continue expanding in the coming months and into 2025 as the economy continues growing - the World Bank expects GDP to grow 3.3% in 2024 and 4.1% in 2025.

Data Download

Meanwhile, capital and reserves increased 11% y/y to AED 512bn and provisions for non-performing loans decreased 19% y/y to AED 100bn at the end of August.

The value of UAE banks' gross assets increased 12% y/y to AED 4.4tn at the end of August. In the breakdown, gross credit increased 8% y/y to AED 2.1tn. Looking at banks' liabilities, deposits rose 14% y/y to AED 2.7tn in August as resident deposits increased 15% y/y, while non-resident deposits increased just 1% y/y. Within resident deposits, private sector deposits increased 19% y/y while government deposits were unchanged y/y.

Separately, the broadest monetary aggregate M3 increased by 17% y/y to AED 2.7tn (USD 734bn) as of end-August. That was faster than the 16% y/y increase in July. Nevertheless, the consistent increases have not led to increased inflationary pressures. In fact, inflation has been gradually slowing.

The increase in monetary aggregates suggests the credit and liquidity conditions across the country remain supportive of economic growth. The growth of the M3 aggregate came as the monetary aggregate M1 (currency in circulation outside banks + monetary deposits) rose 14% y/y to AED 888bn (USD 242bn). Similarly, there was a 15% y/y increase of the M0 monetary aggregate (currency issued) to AED 146bn (USD 40bn).

• We expect reserves to increase y/y in September and subsequent months

The UAE central bank's total foreign assets increased 39% y/y to AED 812bn (USD 221bn) as of end-August, according to the central bank. That was faster than the 31% y/y increase in July and an increase of 4% m/m.

Data Download

The UAE's external assets are composed of the central bank's international reserves and of assets held by the country's sovereign wealth funds, which play a dual role for both precautionary motives and as savings for future generations. Total foreign assets exclude the central bank's reserve tranche position and SDR holdings.

We expect foreign assets to post y/y increases in September and the coming months.

• CBN allotted NGN 757bn, including NGN 742bn in one-year notes
• Subscriptions for 364-day bill reached NGN 2.53tn
• CBN reports a strong increase demand for longer-tenured securities

The CBN offered NGN 7.86bn worth of three-month T-bills at its regular auction held on December 4, eventually selling notes worth NGN 2.31bn, according to data on the CBN's website. The stop rate remained at 18% compared to the November 20 auction. The central bank also sold NGN 13.25bn worth of 182-day T-bills and NGN 741.15bn worth of 364-day bills. The CBN allocated NGN 756.69bn across the tenors. Total subscriptions reached NGN 2.55tn across the three tenors, substantially higher than NGN 1.77tn subscription at the previous auction. The majority of interest was in the 364-day Treasury bills, for which subscriptions reached NGN 2.53tn.

Data Download

The unprecedented level of investor interest was nearly five times the amount of system liquidity available of over NGN 800bn, according to CardinalStone. According to the firm, the strong demand for T-bills was partly driven by speculative trading. The increase in investor interest follows the recent 25bps hike in Nigeria's interest rates to 27.5% by the monetary policy committee, aimed at controlling inflation. The stop rate for the 1-year T-bill dropped from 23.5% on Nov 20, but remained high at 22.93%. The yield on the one-year bill dropped to 29.75% from the previous record high of 30.7%. Analysts at Meristem had anticipated this decline, citing the reduced maturing obligations of NGN 583.26bn, down from NGN 610.8bn in the previous auction.

• Naira appreciated to NGN 1,640 per dollar in the parallel market on Wed
• CBN launched its Electronic Foreign Exchange Matching System on Mon
• ABCON clarified that BDCs can only buy FX from authorized dealers if they meet capitalization requirements

The naira saw a significant appreciation against the US dollar in the parallel market, reaching USD/NGN 1,640 at the close of trading on Wednesday (Dec 4), according to reports. This marks a 5.2% gain or NGN 90 compared to the previous day's rate of NGN 1,730. This comes after the CBN went live with its Electronic Foreign Exchange Matching System (EFEMS) on Monday, a platform aimed at improving transparency and efficiency in the forex market. EFEMS matches buy and sell orders electronically in real time. Authorized dealers can use the system to execute transactions quickly while ensuring oversight and visibility for regulators. While official data on trading volumes is yet to be confirmed, early signs suggest a strong start for EFEMS. However, experts caution that sustaining this momentum will depend on maintaining liquidity and balancing supply and demand effectively.

Association of Bureaux De Change of Nigeria president, Aminu Gwadabe, highlighted the platform's goals of achieving price discovery, increasing transparency and integrating market participants. Gwadabe also clarified that the CBN's recent policy allowing bureau de change operators (BDCs) to purchase FX directly from authorized dealers is not automatic. Clearing up some ongoing confusion, he said participation is contingent on meeting new capitalization requirements introduced in May 2024, which mandate either NGN 500mn for Tier 2 BDCs or NGN 2bn for Tier 1 BDCs. Gwadebe noted that the new policy might motivate operators to meet the capitalization requirements, offering a way for licensed BDCs to participate under the updated framework.

• Bill repeals the Securities and Exchange Commission Act
• It expands the SEC's regulatory framework to protect investors
• Stricter penalties for Ponzi operators include fines of at least NGN 20mn

The senate passed the Investments and Securities Bill (ISB) 2024 on Wednesday (Dec 4), repealing the Securities and Exchange Commission Act and updating the Investments and Securities Act of 2007. The ISB aims to improve the regulatory framework of the Securities and Exchange Commission (SEC) by introducing measures to protect investors, combat fraudulent practices and align Nigeria's capital market regulations with global standards. Senate chief whip Tahir Monguno said the legislation would promote fair and transparent market operations. The bill establishes the SEC as the apex regulatory authority and addresses key areas such as derivatives, financial market infrastructure and systemic risk management.

The ISB introduces key amendments to strengthen investor protections and increase market competitiveness. Notably, it imposes stricter penalties for Ponzi scheme operators, with fines of at least NGN 20mn or imprisonment of up to 10 years. Additionally, the Investor Protection Fund will now cover investor losses from deregistered brokerage firms. The ISB 2024 also incorporates frameworks for Commodity Exchanges and Warehouse Receipts, aimed at advancing Nigeria's commodities sector. According to SEC director general Emomotimi Agama, these changes are crucial for positioning Nigeria's capital market as globally competitive and driving economic diversification.

Naira devaluation raises foreign debt by N30tn - Report (Punch)

Fuel imports hit 2.3bn litres despite local production (Punch)

Senate criminalises maize export, fixes one-year jail (Punch)

Ramaphosa pledges S'Africa's support for Nigeria to join G20 (Punch)

Nigerian stock market gains N286bn as Goldbrew, others lead (Punch)

Port-Harcourt refinery up, running, NNPC insists (Punch)

Netflix denies plans to leave Nigeria (Punch)

Nigeria seeks global investment in mining with new geo-data platforms (Punch)

Oyedele: Derivation Formula'll Reduce Inequitable Resource Distribution (ThisDay)

Uzodimma: Nigeria Has No Reason To Struggle To Feed Its Population, Provide Employment For Youths (ThisDay)

Shettima: $1 Trillion Economy By 2030 Will Remain Mirage Without Private Sector, Partners (ThisDay)

European Union, IDEA, Others Push To Bolster ICPC Capacity To Fight Corruption In Nigeria (ThisDay)

11 Banks Generate N6.5tn From Loans And Advances Amid Interest Rate Hike (ThisDay)

Finally, Senate Passes ISB 2024 Into Law (ThisDay)

Nigeria's treasury bills are the safe bet for investment in 2025 - Egie Akpata (Nairametrics)

New CBN guidelines: BDC operators say buying forex from authorized dealers is not automatic (Nairametrics)

• Marketers imported 2.3bn litres of petrol between Sep and Dec
• Limited output and pricing constraints have sustained the reliance on imports

Despite the start of local petrol production by the Dangote Refinery and Port Harcourt Refining Company, oil marketers have continued importing fuel to meet demand. Between September 11 and December 5, marketers brought in 2.3bn litres of petrol, contrary to earlier announcements to focus on domestic supply. The numbers cited are attributed to documents obtained by media from the Nigerian Port Authority as well as analysis by the Punch publication. The Dangote Refinery (capacity of 650,000 barrels per day) began operations in September, while the Port Harcourt Refinery's Area 5 facility (capacity of 60,000 bpd) commenced production recently. Analysts say limited output and pricing constraints have kept importation necessary. In the last three days alone, 52,000 metric tonnes, equivalent to 68.74mn litres of petrol, were imported.

Agreements that allow marketers to negotiate directly with the Dangote Refinery have yet to produce significant changes. Recent data shows that vessels carrying petrol continue to arrive at Lagos and Calabar ports, delivering millions of litres daily. In October, the NNPC and its partners imported over 994,000 metric tonnes of petrol. This was accompanied by large volumes of diesel and jet fuel, with a total value of approximately USD 1.8bn.

• Improvement should be due to ceasefire with Hezbollah
• Net balance sheets in November were positive in all industries but in hotels

The future expectations for the next month (December) for almost all surveyed by the stat office (CBS) sectors, namely industry, construction, retail, and services, improved sharply in November, according to the latest business confidence survey. The only sector, which continues to record low values, deep in the negative territory, is the hotel business. We think that hotels are not expected to mark any improvement before ceasefire is achieved on all fronts and even then tourism flows would likely recover very slowly, as indicated by developments during previous military escalations. The improvement in the other sectors should be due to the ceasefire with Hezbollah, which was eventually achieved at the end of November but there have been talks that an agreement was imminent, which should have boosted confidence among business managers, we think.

The CBS also says that the net balance sheets of the companies' financial situation in November were positive in all industries, with the exception of the hotel industry. Net balance sheets over the past month in most industries were negative and lower m/m, apparently due to the impact of the Jewish autumn holidays that occurred in October this year. The net balance of retail sales to the domestic market declined sharply, which is significantly influenced by seasonal factors that lead to an increase in sales ahead of the holidays and a decline in the holiday month, the CBS explained.

• Only instrument to support activity is loan deferral scheme, which was again extended this week

The Bank of Israel (BoI) remained inactive in November too as far as war related instruments are considered, according to a press release. This has been the case in all months since February this year when the BoI provided the last disbursements under the cheap credit programme that ended in the same month. Currently, the only support from the BoI is the credit deferral programme for specific groups of residents significantly affected by the war and it again extended this programme earlier this week to maintain it valid by the end of March 2025.

• Revaluation effects push up reserves, government outflows offset effect
• Reserves cover 29.6 months of imports

The foreign exchange reserves of the Bank of Israel (BoI) rose by 0.5% m/m or USD 1.0bn to USD 217.1bn at the end of November, according to latest data. Thus, the reserves recovered somewhat the decline in October and were by 1.5% or USD 3.3bn lower compared to the historic high of USD 220.4bn at the end of September. The BoI explains the increase in November with revaluation effects that added USD 2.3bn to the reserves in the period. This was partially offset by government activities, which resulted in outflows of USD 1.1bn in November. The BoI does not report any other significant flows in the period.

Data Download

Forex reserves have increased by USD 12.4bn or 6.1% since the year started. They accounted for 41.7% of GDP at the end of the month, higher than 39.5% of GDP at the end of 2023, the BoI said in the press release. The reserves secured 29.6 months of imports at the end of the month, increasing from 26.7 at the end of 2023, according to our calculations.

• Growth is partially due to low base but chain store sales increase strong compared to Oct 2022 too
• Chain store sales are indicative of strong private consumption this year, supported by resilient labour market

Chain store sales increased by 8.8% y/y in October, the strongest pace of increase since December, according to latest seasonally-adjusted data of the stat office (CBS). The pace accelerated compared to the previous month and we note that the performance in both months was boosted by a low base, which is to persist in November too. Recall that the war started in October last year, which weighed on non-food private consumption while food sales surged due to stockpiling at the backdrop of large uncertainties due to the war. Yet, total chain store increased by also strong 7.2% compared to Oct 2022 as well. Food sales edged down by 0.1% y/y in October this year, which we consider to be a strong performance this year as they recorded a growth compared to Oct 2022. In monthly terms, total and food chain store sales grew by 1.5% m/m each. In trend saar terms, chain store sales rose by 0.6% saar in Aug-Oct easing from 1.7% in May-Jul. Food sales rose by stronger 1.1% saar in the period but they also decelerated from 2.3% in the previous period.

Data Download

Chain store sales have been increasing in all months since December following declines in Sep-Nov as private consumption remained robust this year despite the war, supported by the resilient labour market and wage increases as well as the reduction in foreign travels. Chain store sales grew by 6.2% on average per month in Jan-Oct as compared to an average per month of 2.1% in Jan-Sep on average (the months before the war started) and by the same 2.1% on average in the full 2023.

• MK pledges to propose issue regarding differences between Attorney-General and government again

The Knesset plenum rejected the proposal of a MK from the senior ruling Likud party that said that the government and Attorney-General Gali Baharav-Miara have essential and ongoing differences in opinion, which prevents efficient cooperation. The motion was an agenda proposal, which means that they are not legislative initiatives and the meaning is largely symbolic. If the vote passed, however, the Knesset would have had a more prolonged debate on the issue in the future. MK Avichai Boaron who tabled the proposal, pledged to bring it up again next week. We note that ministers as well as coalition MKs have been accusing Baharav-Miara of intentionally blocking legislative initiatives with the aim of bringing down the government. The major responsibilities of the Attorney-General comprise providing legal advice to the government, representing the government in petitions against it in the High Court of Justice, and overseeing the state prosecution apparatus. Last week, communications minister Shlomo Karhi said that total of 14 of the 33 ministers have signed a letter demanding the dismissal of Gali Baharav-Miara. If half of the ministers sign the letter, government secretary Yossi Fuchs must bring up the proposal to the full government for discussion, a spokesperson for Karhi explained last week.

• Petition called Netanyahu to be declared at least partially unfit during testimony in his corruption trial
• Netanyahu requests court to change duration of testimony, not to go to court each day

The High Court of Justice rejected on Wednesday evening a petition for declaring PM Benjamin Netanyahu unfit to serve as PM or at least partially unfit to serve as PM while his testimony in his corruption trial lasts, local media reported. Thus, the court adopted the position of Attorney General Gali Baharav-Miara and ruled that there is no room for its intervention in the matter. We note that Netanyahu's testimony begins on Tuesday next week after his lawyers tried to postpone it several times but received a delay of a few days only. The place of the testimony was changed to Tel Aviv from Jerusalem due to security issues, which were cited as one of the reasons why Netanyahu should not appear in court now. On Wednesday, Netanyahu approached the court with another request - to reduce his testimony in his trial from three times a week to twice a week. He also requested not to testify on consecutive days and to start his testimony one hour later than originally scheduled. Netanyahu argued that this was necessary due to his schedule packed with security-related meetings and communication with foreign officials.

New Amnesty International Report Accuses Israel of 'Genocidal Intent' in Gaza Strip (Haaretz)

IDF Spox Rapped for Slamming Bill Granting Immunity to Defense Personnel Leaking Info (Haaretz)

Bill to Allow Firing of AG Stalls in Knesset as Coalition Advances Controversial Laws (Haaretz)

Israel presents Hamas new ceasefire and hostage release deal An Israeli official noted, "The Egyptian and Qatari mediators believe Hamas might now agree to a hostage-release and ceasefire deal." (Jerusalem Post)

'It will lead to civil war': Minister Amsalem warns against imprisoning Netanyahu (Jerusalem Post)

EDITORIAL UN's diplomatic failure: Why the two-state solution won't bring peace to Israel (Jerusalem Post)

Amnesty report accuses Israel of genociding Palestinians in Hamas war (Jerusalem Post)

Only Netanyahu's conflict of interest prevents the dismissal of the head of the [security agency] Shin Bet (Calcalist)

Last-minute loot: Another 2 billion for [national security minister] Ben Gvir, additional power for [minister supervising state companies] Amsalem (Calcalist)

OECD report shatters [finance minister] Smotrich's parallel universe (Calcalist)

Do the ultra-Orthodox education networks receive an illegal budget of NIS 334mn per year? (TheMarker)

Will the foreign companies return to flying to Israel - and what is the chance that ticket prices will drop? (TheMarker)

Pay attention to Teva: the sector that could become the surprise of the year in 2025 (Globes)

Decrees from all directions: What will become more expensive in 2025 and by how much? (Globes)

• Spending is set at NIS 619.6bn, of which NIS 10bn might be used only if war continues
• Budget deficit in documents set at 4.3% of GDP but cabinet endorsed recently its increase to 4.4%

The finance ministry submitted on Wednesday to the Knesset the 2025 budget bill and the accompanying arrangements bill, which sets the economic policies of the government in the period. The spending amount without debt repayments in the budget document is set at NIS 619.6bn, by NIS 10bn higher than the approved by the government spending ceiling at the end of October. Finance ministry officials said as quoted by local media that the extra amount will be placed in the general reserves section and will be only available to use if the war continues beyond expectations and the government approves its use. The spending has different composition then the initially endorsed when looking at the different ministries as the negotiations between the treasury and the different ministries continued even after the budget was approved by the government. Yet, the budget documents do not include detailed budget allocations for each ministry and the revenue forecast. The deficit target is set at 4.3% of GDP (the above said NIS 10bn that would sit in the reserve excluded, if included, the deficit increases to 4.8% of GDP). Thus, local media estimated that the budget is based on revenue forecast of NIS 521bn, which requires adjustment measures of some NIS 24bn. It should be noted though that after the initial approval of the budget by the government, it further endorsed extra NIS 2bn in spending that added 0.1pp to the deficit to 4.4% of GDP, which is apparently not included in the submitted to the Knesset documents.

The budget bills need to pass three Knesset plenum readings before becoming laws, the first reading is expected on Sunday, Dec 8, as indicated by finance minister Bezalel Smotrich. Only the tax laws are expected to the approved by the end of this year while the full budget is expected to pass in January.

• Exports and private consumption to pick up as of H2 2025
• Easing of supply constraints to help inflation moderation

OECD reduced the growth forecast for Israel to 0.6% in 2024 and 2.4% in 2025 in its latest Economic Outlook report from 1.9% and 4.6% in the spring report. The institution expects growth to quicken to 4.6% in 2026. The OECD expects exports and private consumption growth to pick up as of H2 2025, including in high-tech services. At the same time, investment will remain constrained by labour shortages, especially in construction. The VAT rate hike will push inflation higher in 2025 but some moderation is expected in 2026 over easing of supply constraints. The OECD estimates that risks are very large and are both on the downside and upside, mainly related to the development of the war. It recommends to the government to favour permanent fiscal reforms like removing VAT exemptions, and reducing subsidies that encourage staying outside the labour market over measures that the government planned in the 2025 budget and are more likely to be reversed, such as tax-bracket or allowance-level freezes. The OECD specifically mentions ending the suspension of Palestinian workers, removing subsidies that discourage employment of ultra-Orthodox and ensuring that all pupils learn the core curriculum.

Click here for our comprehensive database of macro forecasts.

• However, Hezbollah and Israel have been accusing each other of truce violations

The US and France-brokered ceasefire agreement between Iran-backed Hezbollah and Israel is holding, according to a statement by the US Secretary of State Antony Blinken. The statement comes despite that the two sides have been trading accusations that terms of the ceasefire deal have been violated several times.

Overall, Blinken said that any alleged or purported violations of the ceasefire agreement were being addressed through a dedicated mechanism, adding that Washington is determined to make sure that the truce is upheld. In this context, he expressed opinion that both sides want the ceasefire.

• Selected seeds and fertilizers have been increased

Morocco's Minister of Agriculture, Ahmed El Bouari, reported that autumn crops have been sown across 1.46mn hectares, including 1.16mn hectares for cereals (43% soft wheat, 36% barley, 21% durum wheat), H24 Info reported. Concerning the seeds selected for autumn cereals, they reached 550,000 quintals, up 12% compared to the previous campaign, he said, noting that 21,000 tons of nitrogen fertilizers were made available to 12,000 farmers. He added that the area sown with cereals and legumes amounted to 2.57 million hectares, of which 10% are irrigated. The dam reservoirs for agricultural use reached a filling rate of 28%, supporting irrigation efforts. The minister also said that the multi-risk climate insurance will cover 1mn hectares for cereals, legumes and oilseeds, as well as 50,000 hectares for fruit trees.

The substantial rainfall deficits and high temperatures have had a pronounced negative impact on wheat crop condition in Morocco .Cereal fell to a historic record low of 3.2mn tons this year, but the government 2025 budget projection counts on above average cereal crop of 7mn tons next year.

• Measure to benefit 150,000 punic sector retirees

The government has introduced a tax reform to gradually exempt basic retirement pensions from income tax, Budget Minister Delegate Fouzi Lekjaa said this week as debates on the 2025 budget bill started in the parliament's upper house. Starting January 2025, a 50% tax deduction will apply to pensions under the basic regime, progressing to a full exemption by 2026. However, complementary pensions, which typically involve higher earnings, will remain taxable to support state revenues.

Budget Minister Delegate Fouzi Lekjaa emphasized that the phased approach ensures sustainability while providing immediate relief. The reform aligns with broader fiscal policies aimed at promoting social equity and supporting vulnerable groups, particularly lower-income retirees, while maintaining fiscal discipline.

Currently all pensions higher than MAD 9,000 a month are subject to income tax. According to Media 24, the impact of the move will mostly be felt in the public sector pensioners. Currently some 150,000 people or 20% of the retirees for the civil and military sector fall in this group. Impact on retirees from the private sector will be minimal as only 32 people will benefit from it, the rest have pensions lower than the taxable amount.

• Issue will happen between Dec 10-12 and will be managed by CDG Capital and BMCE Capital Conseil

Moroccan phosphates and fertilizer company OCP has been approved by Morocco's capital market authority (AMMC) to issue a MAD bn (USD 500mn) ordinary bond between Dec 10 and 12, 2024, according to a press release. The bonds will be offered exclusively to qualified Moroccan investors, with five non-listed tranches maturing over 10 to 30 years. Interest rates will vary: Tranche A is adjustable annually, while others have fixed rates.This move aligns with OCP's USD 13bn investment plan for 2023-2027, focused on achieving carbon neutrality by 2040 through the use of renewable energy and desalinated water in its operations. The issue will be managed by CDG Capital and BMCE Capital Conseil.

OCP has already secured MAD 11bn in debt financing during the first half of 2024 and has been negotiating additional loans exceeding USD 1bn with national and international lenders since June 2024. The OCP's ambition is to increase fertilizer production from 12 to 20 million tons, produce 1 million tons of green ammonia, and generate 5 GW of clean energy by 2027.

• Construction and Manufacturing top list of investment licenses issued
• Egypt was issued highest number of licenses in quarter under review
• Saudi Arabia amended Investment Law to encourage investments

The ministry of investments issued a record-high number of business licences in Q3, of 3,810 marking a sharp 40% on the quarter, according to a quarterly report by the ministry. Further, the number of licenses issued jumped by 74% y/y in the quarter following a 50% y/y increase in the preceding quarter. For comparison, only 351 licences were issued in Q1 2020, when the policy of encouraging business growth was still in its infancy. The growing number of business licenses backs up the government's claim that non-oil economic activity is driven by investments in addition to strong consumption. Analysts attribute the growing capacity of the non-oil economy to absorb labour and to attract investments to the economic transformation program of the government.

Data Download

As usual, Construction topped the list of investment licenses issued in the quarter, accounting for 28% of total, followed by Manufacturing (18%), and Professional, scientific & technical activities (10%). Non-oil manufacturers have been complaining recently about rising input costs and growing supply chain risks, while strong competition is limiting how much costs they can pass on to customers, but the outlook for the manufacturing sector remains favourable. The Real estate also rose robustly, by 138% y/y to 69 licenses. Growth in new mortgage finances has rebounded this year and is fuelling the strong demand for residential real estate, that has resulted in the strong increase in residential real estate prices. With regards to the distribution of licenses by country (a share was calculated for each country participating in the ownership of the capital, the ministry said), Egypt received the highest number of investment licenses issued with 1,029 licenses, followed by Yemen (439), and India (318).

Data Download

Saudi Arabia is trying to shore up foreign investments and counter doubts about its giga-projects after setting overly ambitious FDI targets. Saudi Arabia recorded USD 12bn FDI inflows in 2023, according to Balance of Payments data, falling short of the USD 22bn target and lagging far behind the USD 100bn a year set as a target by 2030. Earlier this year, the government downsized some of the giga-projects - a move that the IMF commended - cut spending on some projects and rationalized others. This has raised some concerns in the country as it signalled the end of what seemed like an era of unlimited resources, but it looks like local investors shrugged off their concerns. In August, the cabinet approved amendments to Saudi Arabia's 25-year-old Investment Law, introducing changes that aim at attracting foreign investment by providing unified set of rules for foreign and local investors. The new legal framework aims at improving transparency and flexibility and is based on the best international practices, reads the document. One of the most notable changes is the abolition of the requirement for an investment license and the equal treatment of foreign and local investors. The new law will come into effect next year.

• Offer price range valuates company around SAR 5.5bn
• More than 50 Saudi companies are preparing to list on Saudi stock exchange in 2025

Hospital operator Almoosa Health Company expects to raise between SAR 1.6bn and SAR 1.7bn (USD 450mn) from its IPO on the Saudi stock exchange (Tadawul). The company, which plans to sell 13mn shares, has set an offer price range of SAR 123 - 127, giving it a market valuation of around SAR 5.5bn. The institutional book-building period started on Wednesday and will end on Dec 10. The retail subscription period will run during Dec 23-24, with final allocations set for Dec 29.

Saudi Arabia and UAE have dominated the IPO market this year and are set to dominate it again in 2025, with notable transactions expected from sectors such as consumer and airlines. More than 50 Saudi companies are waiting to list on Tadawul next year, according to the head of asset management at Bahrain's Sico Bank, Shakeel Sarwar.

• Project, expected to be operational by 2025, will create 700 jobs

The National Agency for Petroleum, Gas and Biofuels (ANPG) and the New Gas Consortium (NGC) have signed a landmark Service with Risk Agreement, along with supporting commercial agreements, to accelerate non-associated natural gas production in Angola, according to a press release. The NGC, comprising Azule Energy, Cabinda Gulf Oil Company, TotalEnergies Angola, and Sonangol Pesquisa e Produção, aims to supply gas to the Angola LNG plant while enhancing Angola's energy security and supporting its energy transition goals. The consortium was designed with the aim of developing the non-associated gas fields discovered in Blocks 1, 2 and 3, as well as promoting exploration in the free areas of Blocks 2 and 3.

This project, expected to be operational by 2025, will create 400 new jobs during the construction phase of the respective platforms, as well as 300 additional jobs during the construction of the onshore gas treatment plant, located in the municipality of Soyo, in the province of Zaire. It will contribute USD 2mn annually to social projects until 2056. It also aims to boost energy self-sufficiency by supplying domestic power and cooking gas, improving efficiency at the Angola LNG plant, and aligning with Angola's strategic focus on monetizing natural gas.

• Key sectors targeted are agriculture, manufacturing, mining, and tourism
• Ethiopia-Saudi Arabia Business Forum laid groundwork for bilateral cooperation

Ethiopia's State Minister of Foreign Affairs, Mesganu Arga, met with Saudi Arabian investors in Riyadh to discuss investment prospects. He emphasized Ethiopia's recent economic reforms, aimed at fostering foreign trade and investment, and highlighted the country's strategic location, expanding economy, and a young population exceeding 120mn. The Ethiopian delegation, led by Ambassador Mesganu, engaged with key Saudi officials, including Hassan Bin Mujab Al-Huwaizi, President of the Federation of Saudi Chambers of Commerce, and Mohammad Alabduljabar, Acting Governor of the General Authority of Foreign Trade. The talks focused on deepening trade and investment cooperation, building on the outcomes of the Ethiopia-Saudi Arabia Business Forum in Addis Ababa, which laid a strong foundation for future economic collaboration. Saudi investors and business leaders expressed keen interest in Ethiopia's diverse opportunities, particularly in agriculture, livestock, mining, tourism, and manufacturing for the broader African market.

Question:

Does Ghana need to import gas? Is there a deficit between domestic production and consumption?

Answer:

Yes, Ghana imports gas as local production, despite growing over the years since it started in 2014, is not sufficient to cover demand. Most of the consumed natural gas is used for power generation, about 90%. The remaining part is used by industries as a heating fuel, mainly in the production of ceramics. According to the latest available data for 2023, domestic production accounted for 83% of the gas supply and the remaining 17% were covered from imports. The imports come via the West African Gas Pipeline (WAGP) from Nigeria. The Tema LNG facility is also under development to allow the import of LNG, but it is yet to be completed.

The Energy Commission also publishes an outlook for the year, and according to the 2024 one, total supply of gas was projected at 149,160 MMscf, of which 122,610 MMscf from domestic production and 26,550 MMscf from imports. Total demand was projected at 145,825 MMscf, of which the bulk, or 132,066 MMScf was expected to be consumed for power generation. However, data for the period Jan-May showed that the supply was lower than expected due to both lower production and lower imports. This was the reason for power shortages. The situation improved towards the middle of the year but the outlook for H2 still envisaged that supply would be short of demand as total production and imports were estimated at 393 MMscf per day while demand was estimated at 432 MMscf per day. The lower-than-expected production was expected due to planned shutdowns at local gas plants, but gas imports are also unreliable so it's not clear what the real situation has been. The next energy report will provide more information.

The data on production/imports can be found in the energy statistics reports of the Energy Commission here. The outlook reports are available here.

Here's a table with production/import based on the Energy Commission data:

• Opinion polls have been mixed but it still appears likely that Mahama will win
• There is possibility of runoff in which case turnout might prove key for final outcome
• Mahama win will result in policy changes, but he will likely stick to IMF programme
• Recent statements suggest Mahama might not be that steadfast on some promises such as anti-LGBTQ signing
• Elections are expected to be generally peaceful despite existing tensions between two main forces

The presidential election on Dec 7 shapes up to be a tight race between John Mahama of the opposition National Democratic Congress (NDC) and Vice President Mahamudu Bawumia of the ruling National New Patriotic Party (NPP), although Mahama still appears to be a favourite. His chances look better mainly due to the public discontent with the NPP's handling of the country's tough economic situation which necessitated a debt restructuring and an IMF programme. The rising prices, growing unemployment and weakening currency have been major issues for voters and Mahama has focused his campaign on measures to boost the economy, create jobs and reduce the tax burden, as well as tackle corruption. A series of different surveys have pointed to sliding popularity and approval ratings of the government and rising perception that it is failing in dealing with the economic challenges, which has fortified the view that Mahama and NDC have better chances to win the elections. Still, it is hard to call the outcome as the election promises to be highly contested.

In any case, despite the existing tensions between the two main political parties, the elections are expected to be generally free and fair, and the transfer of power to be peaceful.

OPINION POLLS

There have not been many opinion polls and even those that have been released have faced criticism depending on what outcome they are pointing too. The only regular polls have been those of Global InfoAnalytics, a local research agency, which has consistently pointed to a Mahama lead. Their latest prediction released before the polls, which was conducted by Nov 16, suggests in its base case scenario an outright win for Mahama with 52.2% of the votes vs. 41.4% for Bawumia. Even in the worst-case scenario for Mahama, he was predicted to win with 50.4% vs. 43.0% for Bawumia. As for parliamentary seats, Global InfoAnalytics predicted NDC winning 150, NPP winning 99 and an independent winning one seat, while 26 seats are difficult to predict so could go either way. However, even if these are all won by NPP, they will still trail behind NDC which will secure a comfortable majority. The survey predicts turnout of over 96%.

While these polls have been the most regular, they have still faced criticism. Some have pointed out that the Global InfoAnalytics conduct its surveys in less than half of the constituencies, and among less than 3,000 respondents, raising questions about its representativeness. In addition, it assumes quite a high turnout given that the average turnout in Ghanaian elections over the years has been around 73% with the highest (about 86%) seen in 2004 presidential vote. The last election in 2020 saw a relatively high turnout of 79% and it might be even higher this year given the strong public interest.

Another survey released more recently, by Professor Smart Sarpong, who heads research at Kumasi Technical University, predicted that none of the candidates will win in the first round and there will be a runoff. The survey was conducted among nearly 100,000 respondents in all 276 constituencies and put Bawumia in the lead with 49.1% but still below to 50% + 1 to win, ahead of Mahama with 45.8%. This survey predicted a turnout of 81.4%. This survey, however, has been conducted via face-to-face interviews which differs from the phone interviews used by Global InfoAnalytics. It also predicts that Bawumia will win in seven regions against only three in the Global InfoAnalytics polls. Sarpong has defended his methods pointing out that he very accurately predicted the 2020 result using the same type of survey.

There have also been other predictions such as the one by the think-tank Institute of Progressive Governance (IPG), which said it expected Bawumia to win narrowly with 50.2% vs 47.3% for Mahama. However, it is not clear how the survey was conducted. Besides, the IPG has appeared sympathetic to the NPP government, often criticising the opposition, so the results of the survey should probably not be taken at their face value.

In summary, the different methods and approaches have resulted in a varying set of poll results, which do not allow to make a final prediction. In any case, the election is expected to be highly contested, and could possibly go to runoff. The final outcome will largely depend on the turnout, especially in some regions. Mahama seems to be in the lead in swing regions while Bawumia dominates in the second most populous region Ashanti. Another factor will be the undecided voters who the Global InfoAnalytics surveys have put at around 9-10% which means they can sway the final result. The ability of Bawumia to convince voters about the NPP government's achievements and mobilise the party supporters will be of importance too, since apathy has been estimated to be higher among NPP voters.

POST-ELECTION SCENARIOS

As mentioned, given the lack of reliable opinion polls, it is very difficult to predict the outcome of the elections with any certainty. There are basically, three options: an outright Mahama win, a runoff, and an outright Bawumia win, which currently appears the least likely.

Mahama wins in the first round

The likelihood of this scenario will increase in case of a high turnout, especially in swing regions. Such a result would imply a majority for NDC in parliament which should make it easier for the new administration to implement its policies and reforms. The current parliament is almost split which has made it difficult for the NPP government to push through some legislation, including the budget. Mahama has said he will look to implement measures to boost the economy and create jobs, review the tax regime to reduce the burden on Ghanaians and attract more investment in the oil and has sector, and invest heavily in infrastructure.

He has also said he plans to renegotiate the IMF programme but has not provided concrete details aside from saying he would potentially seek more funding and ensure debt sustainability. While his track record with implementation of IMF programmes has not been good (there was major fiscal slippage ahead of the 2016 election when he was president), Mahama has not outright said he will seek significant changes to the programme and apparently would prefer to stick to it. Still, there are expectations among his supporters that he will renegotiate some of the stringent fiscal adjustment measures and his pledges to cut or abolish some taxes, plus his sizeable infrastructure investment plans, have raised some questions about his fiscal policy.

Another issue is the anti-LGBTQ legislation which Mahama has pledged to sign if elected. This could potentially have impact on external financing. The outgoing finance ministry issued a brief earlier this year which estimated that the law enforcement could result in the loss of g USD 3.8bn World Bank support as well as have negative implications on budget financing, reserves and the exchange rate. However, in a recent BBC interview, Mahama refused to provide a clear answer on whether he will sign the bill, saying he will first look what is in it. This suggests there is a possibility he will not be in a hurry to sign it and might propose changes.

With regards to one of his central election promises, a 24-hour economy, Mahama was also vague, saying he might not be able to fully introduce it in four years, but he will start the process. He also could give a number about its expected costs, which is the main question mark about the idea.

All this suggests than Mahama might not be willing to make significant policy changes and will stick to the reform path agreed by the current administration.

No candidate wins in the first round and there is a runoff

The likelihood of such scenario, where no candidate gets 50% +1 votes in the first round, is not that low given that the race is expected to be highly contested. In case of a second round, the final outcome will be decided by the other candidates, mostly likely the top two that are expected to come third and fourth in the vote, Alan Kyerematen of the Movement for Change, and Nana Kwame Bediako of the New Force Movement, the combined support for whom has been estimated in different polls at around 4-5%. It is not clear whom they might support in a second round. Kyerematen was previously member of the NPP which he left unhappy with the atmosphere and the pressure he claimed he faced because of his presidential ambitions. Nana Kwame Bediako has not been members of either of the two major parties, but he comes from Ashanti region which is a stronghold of NPP. Still, it is impossible to say which way they will go in case of a runoff which means it can be won by either of the two main candidates. The turnout, and whether it will increase and in which regions, will also be important for the final outcome.

Bawumia wins in the first round

This appears to be the least likely scenario at the moment, although it again will depend on whether the NPP have managed to mobilise its supporter base in its strongholds, and whether it will make headways in swing regions. Such a scenario will to the most extent ensure a policy continuity and an adherence to the IMF programme. The IMF Board, which has just completed the third review under the arrangement, noted that the government has pledged commitment to reforms and fiscal adjustment, and this is expected to remain the case if NPP wins.

However, there are still risks of a slippage in the pre-election period. The IMF has revised up the 2024 fiscal deficit projection to 4.7% of GDP from previously programmed 3.5% because of the spending pressures stemming from the dry spell in the northern parts of the country and the energy sector challenges. However, other spending could also have been increased ahead of the elections although it is hard to say what the budget performance has been in H2 as the government has not released any new data beyond Jan-Jul. Even the economic data released ahead of the MPC meeting in late November did not contain newer numbers which raises some questions. Still, the NPP is expected to stick to the agreed reform programme and continue on the path of fiscal consolidation and complete the debt restructuring if elected.

ELECTION FRAMEWORK

The president is elected by a majority vote through a two-round system to serve a four-year term. He can serve a maximum of two terms in office. To be elected in the first round, a candidate should get 50% plus 1 of the votes cast, and if no one is able to achieve that, a run-off is held within 21 days, in which the candidate that secures the most votes wins.

The parliament has 275 MPs who are elected using the first-past-the-post system in single-member constituencies to serve four-year terms. However, the legislature is not proportionate, with low-population districts receiving more representatives per person than those with high populations. Thus, a party which has received more votes can actually get fewer or equal seats to the other, which happened in the 2020 elections (NPP had more votes that NDC but got equal number of seats in parliament, 137).

The election results are usually released within two days after polls are closed by the Electoral Commission. The results can be challenged within 21 days of the declaration of the results but the petitions against the presidential election results should be filed with the Supreme Court and the petitions against the parliamentary elections results should be filed with the High Court. A challenge to the validity of the process on the grounds of corrupt practice or any other fraud must be done prior to the publication of results.

• Mahama says he will not accept results if there are election irregularities and violence
• Says he will see what is in anti-LGBTQ bill before signing
• Admits 24-hour economy might not be implemented in full in four years

The main opposition candidate in the forthcoming presidential election, John Mahama, said he would accept the election results only if the process is transparent and fair. Speaking to BBC, he said that he would not accept the result if there are election irregularities and violence, such as ballot snatching and police brutality and intimidation.

He was also asked whether he will sign the anti-LGBTQ bill into law and he refused to give a straight yes or no answer saying he would have to read it and see what's in it. This suggests that he might not be in a hurry to sign the legislation either, given its potential negative impact on relations with the international community and external financing. The opposition has strongly criticised President Nana Akufo-Addo for not signing the bill, which enjoys strong popularity at home. A finance ministry report has warned the country risks losing USD 3.8bn World Bank support as well as negative implications on budget financing, reserves and the exchange rate if the bill is signed into law. This has been a major issue in the election campaign of the two main candidates, Mahama and Vice President Mahamudu Bawumia, who have both pledged to sign it.

Mahama also spoke about the 24-hour economy, saying that the cost of implementing it was not clear as it is a process, admitting that he might not be able to implement it in full in just four years.

Road diversions announced ahead of mammoth NDC-NPP rallies on Thursday (Joy FM)

I'll only accept Election 2024 results if process is fair and transparent - Mahama (Joy FM)

Inflation for November 2024 goes up marginally to 23% (Joy FM)

Fuel price increase: Petrol at GH₵15.30, diesel going for GH₵15.80 a litre (Joy FM)

EC to conduct Special Voting in Eastern and Western Regions today (Citi Newsroom)

Agenda 111: Akufo-Addo to commission new hospitals today (Class FM)

• Increase in headline print mainly due to food prices which surge 25.9% y/y
• Non-food inflation rate eases to 20.7% y/y
• Elevated inflationary pressures led central bank to pause easing cycle last month

The CPI inflation rate picked up to 23.0% y/y in November from 22.1% y/y in October, according to the latest data released by the statistical office. This is the highest inflation level since May 2024 and was mainly driven by higher food prices which rose by 3.8% m/m. The annual food inflation rate also sped up to 25.9% y/y from 22.8% y/y in October. The rise was mainly attributed to higher prices of vegetables, tubers and plantains, which might have been impacted by the dry weather in some parts of the country, but also the weaker cedi as some food products are imported. At the same time, non-food inflation slowed to 20.7% y/y in November from 21.5% y/y in October, which was mainly due to the categories of restaurants and accommodation, and education. In m/m terms, CPI rose by 2.6%, up from 0.9% in October, mainly due to food prices which rose at a much faster pace.

Data Download

With the November print, inflation has now accelerated for a third consecutive month. The uptick has been attributed to the pass-through from the cedi depreciation earlier this year, the dry spell in some parts of the country, and higher food and fuel prices. The elevated inflationary pressures have led the central bank to pause the easing cycle after two previous rate cuts and leave the rate on hold at 27% at the MPC meeting in late November. It now expects inflation to average 10.2% over the next 12 months and return to the 6-10% target range in Q4 2025.

• BCEAO expects growth to pick up to 6.3% this year supported by strong credit

• Inflation is seen to remain above target this year at 3.6%
• Inflation outlook for 2025 remains subject to upside risks

The monetary policy committee (MPC) of the West African central bank (BCEAO) left the benchmark interest rates unchanged at a meeting held on Dec 4. The minimum bid rate for liquidity auctions was left at 3.50% and the marginal lending rate at 5.50%. The reserve requirement ratio was also kept at 3.0%.

The MPC noted that economic activity in the West African Economic and Monetary Union (UEMOA or WAEMU) remained robust and was expected to pick up to 6.3% in 2025 from 6.0% in 2024. It is expected to be supported by credit activity which grew by 5.9% as of end-September, up from 5.2% at end-June. The BCEAO also expects the external position of the Union to strengthen this year thanks to improved trade balance, and together with the mobilisation of external resources, it should help build reserves.

UEMOA inflation reached 4.1% y/y in Q3, unchanged from Q2 but higher than 2.9% y/y in Q1. In October, inflation slowed to 3.4% but remained above the 3.0% target. The inflationary pressures were attributed to the insufficient agricultural production. The BCEAO expects inflation to inch down to 3.6% this year from 3.7% in 2023. The outlook for 2025 is subject to upside risks including regional security, weather conditions and global geopolitical tensions and their impact on global energy and food prices. Unlike their September MPC statement, the BCEAO did not say that they expect inflation to return to target next year.

• Deals include 372MW thermal power plant, 50MWp solar power plant
• Deals were signed during recent SIREXE exhibition

The government signed agreements for the construction of two power plants with a total cost of XOF 375bn (USD 600mn) on the sidelines of the SIREXE exhibition concluded recently. One of the deals was signed with the company Songon Energies to finance, build, own, operate and transfer a combined-cycle thermal power plant in Songon, an autonomous district of Abidjan. Songon Energies is majority owned by China's CEECOIC (China Energy) and in September signed a loan agreement with Standbic Bank and Banque Atlantique. The cost of the 372MW power project is estimated at XOF 342bn (USD 547mn) and it is expected to be completed within 36 months.

The second deal was signed with Katiola Solar Power, owned by JC-Monfort, for the construction of a 50MWp solar power plant in Katiola in central Ivory Coast. The cost of the project is estimated at XOF 32.9bn (53mn) and is expected to be completed by end-2026.

The government plans to increase the country's electricity generation capacity to 3,500MW in 2025 from 2,907MW in 2023 and further to 5,200MW in 2030 under the energy ministry's 2022-2040 master plan. It also wants to increase the share of renewable energy in the energy mix to 45% by 2030 from about 30% now.

• 351-day T-bills sold at 6.0%
• T-bills and bonds issued via auction this year so far amount to 106% of full-year plan

The government sold XOF 53.1bn T-bills at an auction held on Dec 3, in line with the target. Sold were T-bills with residual maturity of 351 days in a combined auction which both sold new treasuries and also bought back 1-day T-bills in the amount of XOF 50bn. The T-bills were sold at a weighted average rate of 6.0%.

With the latest auction, the total amount of securities issued this year so far is XOF 3,054bn, which is about 106% of the domestic issuance plan for the year set in the 2024 budget at XOF 2,872bn.

Electricity consumers face new levy for street lighting (Business Daily)

Taxes, housing levy and SHIF take a toll on salaried workers (Business Daily)

Public sector lost 20 times more working days due to strikes (Nation)

Detectives uncover tax evasion syndicate involving smuggled ethanol (Nation)

City Hall okays plan to lease out Uhuru, Central parks (The Standard)

Tanzanian firm buys Bamburi cement after tycoon drops out (The Standard)

• Improvement reflects expansion in output, new orders and employment
• Sentiments on 12-month outlook remain weak

The CfC Stanbic Bank PMI showed that the private sector activity improved in November, as the index climbed to 50.9, up from 49.7 points in the preceding month, and further above the 50-points threshold signaling stabilization. The improvement reflected expansions in output, new orders and employment, attributed to the gradual improvement of the business climate following the youth protests in the summer and ahead of the festive season.

Output posted growth above the series average in the review month, reflecting strong growth in new orders, the fastest in 6 months. On the downside, growth was largely driven by services, wholesale and retain trade, whereas other sectors posted declines. The increase in output drove a marginal rise in employment, albeit slower than October, the survey showed. Input costs increased in the review month, which was attributed to higher taxes, and selling charges rose accordingly, with the pace of growth reaching a nine-month high. Also on the downside, expectation remained weak, with just 8% of firms seeing activity expanding over the next 12 months.

We note GDP growth slowed to 4.8% in H1 from 5.6% in 2023, as lower govt spending and youth protests weighed down. It is now seen picking up to 5.0% in the full year, and remaining at that level in the medium term.

• Manufacturers said to be operating at half capacity, halted expansion plans
• Sector's contribution to GDP has stagnated in recent years

Unpredictable tax policies over the last two years have taken a toll on Kenya's manufacturing sector, with 60% of companies pausing expansion plans, according to local news reports citing Tobias Alando, Acting CEO of Kenya Association of Manufacturers (KAM). The uncertainty surrounding fiscal policies and taxation has particularly affected manufacturing inputs, weakening the industry's competitiveness.

Annual budgetary changes have imposed additional tax burdens, forcing many firms to operate at reduced capacity, Alando said. The sector's contribution to Kenya's GDP has consequently stagnated at just over 7% for the past three years, with growth slowing to 2% in 2023.

• Sizably above pre-announced target of KES 25bn
• Govt targets KES 600-880bn issuance this FY in borrowing plan

The Central Bank sold KES 53bn worth of T-bonds due in 2033 (14.15% coupon) and in 2038 (13.20% coupon) in its first bond auction in December, which closed on Wednesday, according to the auction outcome published on its website. This brings the total amount of T-bonds issued so far this FY to KES 304bn, against an indicative issuance plan of KES 600bn - KES 880bn, according to govt's published borrowing plan. KES 9bn of the proceeds will go towards repayment of maturities falling due, whereas the remainder KES 45bn will be used to fund the budget.

Demand stood at KES 71bn, sizably above the pre-announced auction target of KES 25bn, and was shifted towards the 2033 maturity. The weighted average yield on accepted bids of the bond printed at 14.69%, down from 15.97% in the preceding sale of the paper in November. The 2038 bond attracted KES 24bn worth of bids with the weighted average yield on accepted bids printing at 15.11%.

• Pledges to work towards building an exemplary National Assembly
• Only one opposition parliamentary group was formed, comprising the 16 MPs from Takku and an independent MP

El Malick Ndiaye, the newly elected president of Senegal's National Assembly, has committed to fostering an inclusive and collaborative legislative environment, according to local news reports citing his address to the members of the 15th legislature. Ndiaye vowed to serve with dialogue, openness, and justice at the core of his leadership. Ndiaye further expressed gratitude to President Faye and PM Ousmane Sonko for their support and encouragement, acknowledging the trust placed in him as a significant responsibility to serve the nation with dedication and fairness. Ndiaye also extended thanks to fellow deputies for electing him and assured them of his commitment to building a modern and exemplary Assembly.

We recall the ruling PASTEF party won an overwhelming majority in the National Assembly in the recently concluded legislative election, obtaining 130 out of the 165 seats. The Takku Wallu Senegal Coalition, led by former president Macky Sall, came at a distant second with 16 seats, and - with the threshold for forming a parliamentary group set at 17 seats - could only form a one with the support of an independent MP. Takku's group will be led by former justice minister Aissata Sall. Macky Sall himself tendered his resignation as an MP. The remainder 18 MPs have reportedly opted to not affiliate with any of the two groups.

• A former MP joins the govt as labor minister in minor reshuffle
• President, PM urge for result-focused governance, actionable plans for H1 2025

President Bassirou Faye reaffirmed PM Ousmane Sonko as leader of the government, and announced a minor reshuffle, in which former labor minister Yankhoba Dieme assumes the infrastructure and transport portfolio, succeeding Malick Ndiaye who became president of the National Assembly. A former MP, Abass Fall, will in turn succeed Dieme as labor minister.

Faye congratulated members of the newly installed 15th legislature, urging collaboration with the government to enhance democracy and implement public policies. He re-iterated the focus should remain at advancing the "Agenda 2050," aimed at systemic national transformation. The government was also directed to prioritize responsive and efficient public service to address citizens' needs, particularly those of youth. Faye further announced plans for revitalization of the livestock sector, including increased funding.

Within the same meeting, the cabinet adopted a revised 2024 finance bill and the initial 2025 budget draft, according to the release. The document does not provide any details on either of the two bills.

PM Sonko underscored the need for results-oriented governance and tasked ministries with preparing actionable plans for the first half of 2025. He also urged the cabinet to coordinate on finalizing the general policy statement, announcing plans to deliver it before the National Assembly as soon as possible.

• Merchandise exports turn to a decline of 5.1% q/q in Q3, exceeding the 4.7% q/q drop in imports
• Net gold exports turn to contraction in Q3 following a surge of 34% q/q in Q2
• Weak economy continues to limit pressure on current account

The current account deficit remained broadly stable at s.a. and annualized ZAR 70.8bn in Q3 (upwardly revised ZAR 75.2bn in Q2), accounting for 1.0% of quarterly GDP, the central bank said in a release on Thursday (Dec 5). The market expected a widening of the deficit to 1.7% of GDP. While the goods trade balance remained unchanged at 2.4% of GDP (ZAR 176.9bn) in Q3, the improvement of the services gap to 1% of GDP was offset by a larger deficit on the primary income account of 1.8% of GDP.

Data Download

The goods trade surplus narrowed somewhat from ZAR 179.5bn in Q2 although it remained unchanged as a share of GDP. Exports of goods (excluding gold) turned to a sharp decline of 5.1% in the third quarter which exceeded the 4.7% decline in import. The decline in exports and imports reflected both volume and price easing in the quarter, suggesting continued constraints on the demand from trading partners. Still, terms of trade improved slightly in Q3 as the rand was stronger during the quarter. There was a sharp reversal in net gold exports which increased by 34% in Q2 on demand for safe-haven assets but then declined by 7.8% in Q3. Merchandise exports including gold shrank by 5.3% in the quarter.

The balance on services, income and current transfers narrowed somewhat to -3.4% of GDP in Q3 from -3.5% in Q2 and -3.8% in Q1. While the deficit on the services account shrank to 1.0% of GDP in Q3, this was offset by the widening of the deficit on the primary income account to 1.8% of GDP.

Overall, global trade conditions remain constrained despite the gradual easing of financing conditions across major markets. Demand remains subdued and uncertainties continue to prevail. As economic growth in South Africa remains weak, recording a contraction of 0.3% q/q in Q3 and a very limited expansion of 0.4% in the months of the year, the pressures on the current account should remain subdued. The central bank expects the current account deficit to print at 1.4% of GDP this year but widen to 2.7% as the economy gains momentum in 2026-2027.

SA schoolchildren are floundering, studies show (Business Day)

SAA pilots locked in 11th-hour pay talks as strike looms (Business Day)

Eskom finds buyer for its R9bn home loan company (Business Day)

PETER BRUCE: Shuffling the cards does little to bring about change (Business Day)

Joburg increases security measures ahead of G20 summit (Business Day)

Sassa CEO Busisiwe Memela-Khambula suspended pending probe (Business Day)

R250bn Eskom bailout will be in vain if municipalities don't pay up - CEO (News24)

amaBhungane | Steinhoff's desperate efforts to conceal its financial skeletons have failed (News24)

Blow to Mantashe as high court rules govt can't order new coal plants (News24)

City Power has no lawful tariffs but cuts power supply (Moneyweb)

MK's Molefe says Eskom still faces load shedding risk despite improved performance (Eyewitness News)

Thembi Simelane's unexplained cash (Part Three) - The mystery cash used to pay back R849K for VBS-linked loan (Daily Maverick)

Ramaphosa's Cabinet 'reshuffle' reveals his political impotence (Daily Maverick)

City of Joburg's reappointment of Floyd Brink ruled unlawful and he must vacate position within 10 days (Daily Maverick)

• Next MPC meeting: Jan 30, 2025
• Current policy rate: 7.75%
• EmergingMarketWatch forecast: 7.50%

The MPC delivered the two 25bps rate cuts as expected in September and November, bringing the main policy rate down to 7.75%. The latest inflation print for October stands at 2.8%, a rate well below the mid-point of the 3.0-6.0% target range preferred by the central bank. The baseline projections are for the inflation rate to stabilise near the target on the policy horizon. Inflation expectations two-years ahead reached 4.8% and should continue to moderate further thanks to the experience of lower actual inflation, according to the central bank. Finally, the risks to the inflation outlook are currently (as of November) assessed as balanced.

These developments are all the right reasons which could provide the MPC with the space to reduce its policy rate further next year. In the base-case scenario, we anticipate that the policy rate could be cut by another 50bps in the first half of the year. The first rate meeting in 2025, which is set for Jan 30, could deliver the initial 25bps reduction. The following meetings are scheduled for Mar 20 and May 29.

Data Download

Although the central bank commenced with anticipated monetary policy easing in Q3 and Q4 2024 and the base-case remains favourbale for further reductions next year, headwinds have emerged. The MPC went to great lengths during the latest policy rate announcement in November to highlight the unusually high degree of uncertainty and the required level of cautiousness. Governor Lesetja Kganyago pointed out that a 50bps reduction was not on the table in November and that the MPC discussed adverse scenarios in which inflation was above the target over the policy horizon. Cautiousness is indeed warranted along several broad lines listed below which will require a close monitoring of data and developments:

• US trade and monetary policy - the election of former president Donald Trump in November is a considerable risk on South Africa's export, global commodity prices and the rand. If trade wars materialise and South Africa's exports are affected, the scope for the rand would be open to USD/ZAR 20. This will have a major impact on domestic inflation and monetary policies respectively, via the fuel price most immediately and other import prices as well. Dollar strength since the November elections in the US has already weakened the rand and there is some evidence of resurging inflationary pressures. A shift in US policies could also lead to a shallower or shorter interest rate cutting cycle there which is directly relevant to interest rate differentials with emerging markets. Although the SARB has noted it does not follow the monetary policy steps implemented by the Fed, a change in the course on this front will act to deter further easing in South Africa.
• Geopolitical risks - intensification of the hostilities in the Middle East could lead to higher oil prices and along with potential rand weakness would have a strong impact on domestic inflation.
• Electricity tariffs - NERSA is conducting hearings on the electricity price hike of 36.1% requested by Eskom as of Apr 2025. This is the main driver behind the acceleration of inflation towards 4.6% from late 2025. Electricity and other administered prices are a major headache for the central bank's price objective. The SARB said in its November MPC statement that the medium-term outlook is highly uncertain with material upside risks including higher prices for food, electricity and water, as well as insurance premiums and wage settlements

Monetary Policy Committee Statement, Forecasts and Assumptions

Monetary Policy Review

• Confidence levels remain at 5-year highs in Q4, indicating substantial improvement in retail sales
• Confidence improves the most among more affluent households
• Headwinds include rand depreciation, higher fuel prices and exports performance following US elections

The FNB/BER consumer confidence index remained firm in the final quarter at -6 points, a marginal decline of 1 point from the preceding quarter which was a 5-year high for consumer sentiments, the Bureau for Economic Research (BER) reported on Wednesday (Dec 4). Consumer confidence was at a much more depressed level of -17 in the same quarter last year and the improvement suggests a marked increase in consumers' willingness to spend during the holiday season, the BER stated.

Data Download

The breakdown of subcomponents shows that the economic outlook worsened marginally to -9 in Q4 from -7 in Q3. The households' financial outlook remained positive at 11 points in Q4. Although households' financial outlook was slightly lower than in Q3, it is still much better than the 3 points recorded in the same period last year. Even more indicative is the persistent improvement in the index measuring the suitability of the present time to buy durable goods. Although it is still at negative 21, this index has been rising for six consecutive quarters from -35 in Q2/2023.

The BER also said that sentiments among high-income groups (more than ZAR 20,000) increased further, while the middle-income groups were less upbeat in Q4. Middle-income and lower-income households' confidence levels converged at -7, while the higher-income groups improved to -4. We note that according to data published by clearing house BankservAfrica, most of the early pension withdrawals happened in the income group of ZAR 20,000-25,000 which may have boosted confidence further for this group.

Overall, consumer confidence remained at the highest levels in five years in the final quarter of the year which is a very positive signal for consumer spending during the holiday period. According to Absa Bank data, this Black Friday may have been the biggest on record. Peach Payments services provider recorded 400,000 transactions through its platform on Black Friday. Estimates indicated additional value for the economy of ZAR 88bn during November. According to one study, total Black Friday direct retail gains may add up to ZAR 22bn.

However, headwinds also started to emerge in November, FNB commented, including the marked depreciation of the exchange rate, the rise in fuel prices, the lower stock prices on the JSE, as well as the concerns about South Africa's exports following the election of US president Donald Trump.

• Central bank expects core inflation to remain below 5% target over short term
• GDP growth is forecast at 6.0-6.5% in 2024/25, 7.0-7.5% over medium term
• Risks to inflation and growth outlook are viwed as balanced

The Bank of Uganda (BoU) left the policy rate unchanged at 9.75% to support continued economic growth and price stability, while managing risks to inflation and growth outlook over the short to medium term. In its statement released after the MPC meeting on Dec 4, the BoU's deputy governor Michael Atingi-Ego said that inflation remained low thanks to the previous monetary policy measures which supported the local currency, decreasing food prices and easing global inflationary pressures.

The statement read that the central bank expects core inflation to remain below the 5% target over the short term, averaging 3.7% in FY 2024/25 and 4.2% in 2025/26. It is then expected to stabilise around the 5% target over the medium term. The risks to the inflation outlook were assessed as balanced with those on the upside including heightened geopolitical tensions, tight global financing conditions, and extreme weather. At the same time, risks to the downside include stronger capital flows that could boost the shilling, low global growth and inflation.

The central bank said economic activity remains strong and around its potential, and forecast it at 6.0-6.5% in 2024/25 and 7.0-7.5% over the medium term, supported by increased investment in the extractive sector and the start of oil production in FY 2025/26. The risks to the outlook are viewed as balanced too, including, on the downside, heightened geopolitical tensons, tighter domestic financial conditions that could crowd out private sector, and constrained capacity of the fiscal policy to respond to emerging global shocks. On the upside, the risks were said to include stronger investment in extractive sector, government interventions boosting productivity, global economic pickup and favourable weather.

• 91-day T-bill yield falls b 162bps as govt rejects 95% of bids for this maturity
• Govt securities sold this fiscal year so far account for 49% of revised full-year plan

The government sold T-bills at lower yields at the auction held by the Bank of Uganda on Dec 4 as it again rejected a large share of bids. Investors submitted bids totalling UGX 562bn, but only 45% of them were accepted, or UGX 251bn, which is below the UGX 355bn target for the auction. This is the fourth consecutive auction at which the government has failed to sell the entire offer as it has preferred to reject unfavourable bids to limit yield rise. As a result, yields decreased at this auction, by 8-162bps. The biggest drop was in the yield on the 91-day T-bill, of which the government only sold UGX 6bn despite receiving UGX 131bn bids.

With this auction, the total issuance this fiscal year so far (Jul 1-Jun 30) is UGX 10.4tn, which is 49% of the revised issuance plan which is UGX 21.3tn.

Our generators will continue to play a crucial role even after power crisis subsides - Zesco (News Diggers)

Govt slashes transit permit fees for foreign truck drivers (News Diggers)

Some retail facilities have run out of petrol, but we have adequate stock, assures ERB (News Diggers)

President Hichilema Urged to Abandon Cyber Crimes Bill that is Before Parliament (Zambian Observer)

Mulungushi Textiles is expected to be operational before the end of the year. (Radio Christian Voice)

• State investment group IDC eyes a 10-15 year horizon for job creation
• Investment in rural areas and processing facilities expected to enhance inclusive growth

The Industrial Development Corporation (IDC), a state investment group aims to create over 40,000 jobs in the next 10 to 15 years through strategic investments and partnerships. CEO Cornwell Muleya revealed at the National Skills Productivity and Jobs Summit that the IDC is targeting sectors for long-term job growth, focusing on sustainable development and productivity across its portfolio of firms. Muleya highlighted the IDC's focus on enhancing private sector-led growth by recapitalising firms and investing in processing facilities, particularly in rural areas. The corporation is prioritizing agriculture and mining mechanisation to stimulate economic activities in these underserved regions, aiming to foster inclusive economic growth and create employment opportunities. In a bid to lower transport and fuel costs, Muleya also shared plans to transform Indeni Oil Refinery into a viable national oil marketing company (OMC). The development of the refinery is expected to lead to reduced fuel and gas prices, which will significantly contribute to Zambia's economic sustainability by lowering energy costs for consumers.

We note that Zambia's labour market statistics are not readily available despite the country having a relatively well-established statistical agency. As of 2023, Zambia's total labor force stood at approximately 7.05mn people, according to the World Bank​. This figure includes all individuals aged 15 and older who are either employed or actively seeking employment. The unemployment rate was reported at 5.91%, a slight decrease from 5.99% in 2022.

• Lobito rail corridor aims to boost regional connectivity by 2026 connecting DRC and Zambia to global markets through Angola
• US has pledged USD 550mn for Lobito rail project
• Phase 2 of the Lobito project to connect Zambia and Tanzania with groundbreaking set for 2026
• Hichilema, Biden also discussed the USD 491mn MCC compact and Zambia's debt restructuring program

President Hakainde Hichilema and U.S. President Joe Biden met in Lobito, Angola, to discuss strengthening bilateral ties and advancing the Lobito Economic Corridor project. We recall that in October, the Zambia government announced that Hichilema, alongside leaders from Angola, the Democratic Republic of Congo (DRC), and Tanzania, were set to meet Biden in Luanda, Angola, to sign the agreement for the Lobito Economic Corridor and the Zambia-Lobito Greenfield Railway. This strategic development corridor aims connect the DRC and Zambia to global markets through Angola, enhancing regional trade and infrastructure. The meeting was part of Biden's first and only trip to Africa as U.S. President, where he was joined by Angolan President João Lourenço, Democratic Republic of Congo (DRC) President Félix Tshisekedi, and Tanzania's Vice-President Philip Isdor Mpango. The U.S. has provided a USD 550mn loan for the Lobito project, a critical rail development connecting Zambia, Angola, and the DRC to global markets. The first phase involves refurbishing an existing railway in Angola, which is expected to be completed by the end of the decade. A second phase, aimed at linking Lobito to Zambia through a new railway line, is scheduled to break ground in 2026. This strategic corridor is expected to unlock investment and trade opportunities for the region. Hichilema highlighted its potential to facilitate economic growth by lowering transportation costs and enhancing connectivity.

We note that during the meeting, Hichilema and Biden discussed a new USD 491mn Millennium Challenge Corporation compact, with the U.S. committing USD 458mn and Zambia contributing USD 33mn. The compact will fund infrastructure projects that aim to foster sustainable and inclusive growth, creating jobs and improving access to global markets. Additionally, the two leaders also addressed the importance of debt reform, emphasizing the need for sustainable economic practices. In June, Zambia became the first country to complete a full debt restructuring under the G20's "Common Framework," involving USD 13.4bn in debt relief. This culminated in Zambia successfully entering the IMF program, with the IMF and Zambia reaching a staff-level agreement on the fourth review of the country's 38-month Extended Credit Facility (ECF) in early November. The agreement, which is still subject to IMF Management approval, will unlock approximately USD 185.5mn (SDR 139.9mn) in financing for Zambia. Exact details on what was discussed were not disclosed.

We further note that the IMF and central bank both reduced their GDP growth forecast for Zambia to 1.2% for this year as a result of the drought. The IMF expects regional GDP growth in sub-Saharan Africa to remain flat at 3.6% y/y this year in the October WEO report, revising down the forecast from 3.8% y/y in the April report. Growth is expected to pick up to 4.2% y/y in 2025, higher than the 4.0% y/y forecast in April. The downward revision for 2024 is mainly due to lower expectations for oil exporters' economies, and in particular Nigeria, where economic activity has been weaker than expected in H1, and Angola. We anticipate that the actualization of key projects such as the Lobito project will become key growth drivers in SSA in the medium to long term, subject to environmental related risks.