Egypt condemns Iranian attacks on Bahrain (Ahram)

Egypt seeks closer industrial cooperation with Ireland in pharmaceuticals, technology sectors (Ahram)

Egypt's trade deficit widens 48.8% y/y to USD 4.6bn in March amid rising imports (Zawya)

Egypt records eight M&A deals worth USD 22mn in Q1 2026 (Zawya)

Egyptian Tax Authority says natural gas tax amendments not to affect household bills (Zawya)

Egypt to Repay USD 1.8bn to IMF in H2, Eyes USD 3.3bn in New Disbursements (Sada Elbalad)

IMF Credits Egypt's Central Bank Reforms with Strengthening Monetary Policy Independence (Sada Elbalad)

Egypt, China extend currency swap deal for three more years (Egypt Today)

Egypt's trade deficit widens 48.8% in March 2026 (Egypt Today)

Egypt growth outlook stable but moderates slightly as inflation and energy pressures persist: EBRD (Egypt Today)

Egypt's government fast-tracks EGP 42bn pension payout for 10.2mn citizens via new digital system (Daily News Egypt)

Egypt records eight M&A deals worth USD 22mn in Q1 2026: Ansarada (Daily News Egypt)

• Exports fell 2.5% y/y driven by fertilizers, potatoes, and crude oil exports
• Israel halted gas supplies to Egypt in March, which dragged on industry and LNG exports from Egypt
• Imports jumped 17.8% y/y, driven by gas, petroleum products, crude oil, and wheat
• Trade deficit soars 54% y/y in Q1 as imports jump, export revenues plummet
• Egypt highly dependable on gas imports, war in Iran is a major external shock
• LNG imports jumped 81% to USD 8.9bn in 2025 as gas production weakened and demand for electricity rose

The foreign trade deficit soared by 48.8% y/y to USD 4.6bn in March following an even sharper increase of 87.6% y/y in February, according to data published by CAPMAS. The increase was due to a 2.5% y/y drop in export revenues and a strong 17.8% y/y jump in imports. The increase in imports was broad based, and both oil and non-oil imports rose sharply on the year, though for different reasons. While imports are generally supported by growing domestic consumption and investments, the oil imports jumped as a result of the War in Iran and the spike in gas prices. Egypt has become heavily reliant on gas imports to meet its energy needs. However, Israel halted gas exports to Egypt via pipelines, so the Arab country had to switch to more expensive LNG imports. On a positive note, Israel restored gas supplies in early April, while Egypt recently secured Libyan crude oil shipments - this crude is very similar to the one produced in Egypt, so the refineries should have no problems adding it to their crude intakes.

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The trade deficit soared 54% y/y in Q1 as exports fell by sharp 8% entirely due to non-oil exports such as fertilizers and plastics. Meanwhile, oil imports rose by sharp 18% y/y in the period, as both oil and non-oil imports surged. Interestingly, the import value of crude non-monetary gold soared in the period, reflecting higher prices and higher imported volumes, as Egyptians traditionally step up purchases of gold as hedge against inflation and uncertianty.

We remind that Egypt recorded a USD 52bn trade deficit in 2025, which accounts for about 14% of GDP. The trade deficit rose by 3.5% on the year as imports rose 8.8% y/y to USD 104bn driven by higher petroleum and non-petroleum imports. Crude oil imports doubled to USD 1.5bn in 2025, fuel imports held steady at USD 10.4bn, but LNG imports soared 81% y/y to USD 8.9bn. As noted, Egypt has become heavily reliant on gas imports to meet its energy needs - Egypt was expected to pay USD 12bn for gas imports in 2026, but that was before LNG prices soared. Meanwhile, wheat imports fell by 20% to USD 3.7bn in 2025. We attribute this decline to rising domestic produce on one hand, and the weak capacity of the military-owned agency that took over the grain import operation from GASC, on the other. Overall, imports have been rising steadily following a major currency reform that boosted private consumption, non-oil manufacturing, and investments. The country, however, remains heavily dependent on food and energy imports, which makes it vulnerable to a prolonged war in the Gulf. Egypt thus needs to continue with the structural reforms in order to make the economy more competitive and to face the more uncertain global trade environment.

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Overall, Egypt's trade goods account remains vulnerable to external shocks as the country relies heavily on imports for non-elastic goods such as food and fuels, while major infrastructure projects and growing urban population have fueled imports. The merchandise oil balance is set to remain in deficit for fourth year in a row in 2026, but at least it seems the country has avoided a crippling energy crisis, at least for now.

• Domestic credit expands robustly y/y driven by lending to private business sector, households and government
• Recent World Bank survey found only 3% of corporate investments are financed by bank loans
• Government accounts for 52% of all received loans
• CBE claims on central governments held steady m/m, but remain elevated

Private business sector credit expanded by a strong 23.2% y/y to EGP 3.59tn (USD 69bn) as of end-April (about 20% of GDP), edging up from a 22.8% y/y increase in March, 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 over the past few years, despite economic uncertainty and high nominal and real interest rates. Economic activity has strengthened since 2024, and we think the private business credit supported private investments and the rebound in non-oil manufacturing, and led to a gradual recovery in domestic demand. Looking at m/m dynamics, credit growth was underpinned by a strong 3.0% m/m growth, easing from a 5.5% m/m increase in March, which was boosted by the 10% pound depreciation. 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 22.3% y/y in the month (previously: 22.8% 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 remained strong and is likely to strengthen further as uncertainty caused by the Middle East conflict subsides, consumer inflation moderates, non-oil manufacturing expands, and nominal interest rates are eventually slashed. However, the strong broad money growth that is above its historical average also contributes to existing inflationary pressures. Further, a recent World Bank survey found that many private companies actually rely on internal funds and other sources to finance their investments as bank loans account for only 3% of investment financing.

Lending to government

Net claims on the government, which account for 52% of total credit, fell by 1.2% m/m to EGP 9.34tn following a strong 4.2% m/m increase in the preceding month, and the annual growth rate eased to 11.5% from 16.2% previously. Meanwhile, CBE's net claims on the government remained steady for the fifth month in a row. Egypt had promised the IMF it would reduce direct lending to the government and to government agencies - a practice that undermined monetary policy and put pressures on the pound previously.

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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 2.1% as of end-June. The banking system's net foreign assets have improved significantly on the back of strong portfolio and remittance inflows.

• Ajman benefits from its proximity to Dubai

Real estate transactions in the Emirate of Ajman recorded 864 transactions during the month of May, with a total value of AED 1.6bn (USD 436mn), according to the Emirates News Agency (WAM).

With an area of just 260 square kilometres (about 0.3% of the UAE's total area), the Emirate of Ajman is the smallest of the seven emirates that form the UAE. Despite its size, it is an urban hub that combines modern industrial growth with a maritime heritage. It has a population of about 0.6mn, making it the fourth most populous emirate.

Ajman is situated on the coast of the Arabian Gulf and is almost entirely surrounded by the Emirate of Sharjah. It is unique for controlling two inland exclaves that provide a stark contrast to its coastal capital.

Ajman's property market is experiencing growth, driven by an influx of mid-income families and investors squeezed out by high prices in Dubai. Situated roughly 40 kilometres from Dubai, it acts as a perfect commuter hub for professionals working in the city but seeking larger, affordable living spaces.

Separately, Ajman boasts well over 800 active industrial establishments. Manufacturing accounts for roughly 19% of Ajman's own GDP, making it the top driver of the emirate's economy.

Ajman's economic zones and real estate sectors are the primary engines powering the emirate's modern expansion. Ajman wants to position itself as a cost-effective, business-friendly, and accessible alternative to its larger neighbours, Dubai and Sharjah.

The Free Zones Authority of Ajman (FZA) consolidates the emirate's specialized commercial hubs to offer 100% foreign ownership, full tax exemptions, and streamlined, single-click business setup.

Ajman Free Zone (AFZ) - Established in 1988 near the Ajman Port, this hub hosts over 9,000 companies from more than 140 countries. It is highly favoured by industrial, trading, and logistics sectors looking for low operational costs, cheap licensing (starting around AED 5,555), and warehouses.

Ajman Media City Free Zone (AMCFZ) - A specialized digital and creative hub created for freelancers, tech start-ups, media houses, and e-commerce companies. It allows remote company registration without requiring the physical presence of the owner.

Al Zorah Free zone - An upscale zone specifically structured to blend high-end tourism, luxury hospitality, and premium real estate development.

The economic free zones naturally feed the housing market; as new manufacturing and media companies set up shop, the demand for local workforce housing, offices, and commercial real estate climbs simultaneously.

• Capital inflows were driven by portfolio investments into money market instruments
• Capital flows mostly go into banking, followed by financing
• UK accounted for the highest capital importation followed by USA

Nigeria's imported capital rose by 83.8% y/y to USD 10.37bn in Q1 2026, according to data released by the stats office. Activity was largely driven by a surge in portfolio investments, especially money market instruments and bonds. A year earlier in Q1 2025, imported capital stood at USD 5.64bn. On a quarterly basis, inflows increased by 61% in Q1 compared to USD 6.44bn recorded in Q4 2025. Portfolio investment accounted for 95.1% of total inflows in Q1 at USD 9.86bn, reflecting investor preference for short-term and fixed-income instruments. Within portfolio investment, money market instruments attracted USD 6.5bn, bonds received USD 3.23bn and equities drew USD 131.81mn. The next largest category of inflows was "other investment" at USD 374.78mn (3.6%), mostly comprising of loans. Foreign direct investment (FDI) remained the smallest component at USD 135.08mn (1.3%). FDI's share is even smaller than in previous quarters (Q4 2025 - 5.6%; Q3 2025 - 4.9%).

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FDI in Q1 showed a sharp 62.2% decline from the previous quarter. Analysts warn that Nigeria's heavy reliance on short-term investments, rather than long-term productive capital, poses risks to economic stability. For sustained growth, they recommend attracting more durable investment especially FDI. Looking at the capital inflows by business type in Q1, the banking sector continues to attract the highest inflows (USD 7.55bn or 72.8% of the total), followed by the financing sector with USD 2.43bn (23.4%).

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The manufacturing sector recorded a significant decline in foreign capital inflows. The sector attracted USD 152.27mn which is down 50.7% from USD 308.93mn in Q4 2025. Manufacturing only accounted for 1.5% of the total capital imported in Q1. Other sectors such as telecommunications, agriculture and oil/gas received even smaller inflows, showing the concentration of foreign capital in financial services rather than the real economy. The UK accounted for the highest capital importation by country of origin at 49% in Q1, followed by the Unites States (30.7%) and South Africa (9.5%).

• Approval for the round was granted by president Tinubu
• Commercial bid stage of 2025 round is scheduled for July

The 2026 oil licensing round will begin by the third quarter of 2026, according to an announcement by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on Wednesday (June 3). NUPRC chief executive Oritsemeyiwa Eyesan said approval was recently granted by president Bola Tinubu and petroleum resources minister Heineken Lokpobiri. For the current 2025 licensing round, the commercial bid stage is scheduled for July 2026, after which preparations for the 2026 round will be finalised. Eyesan expressed satisfaction with the strong participation in the current exercise and said rising investments and production levels show Nigeria's oil and gas sector is becoming more attractive under Tinubu's administration.

The 2025 licensing round was officially launched in December 2025, offering 50 petroleum prospecting licenses: 15 onshore, 19 shallow water, 15 frontier and 1 deepwater blocks. Hundreds of companies are said to have expressed interest. After the commercial bid stage is finalised in July, this will be followed by evaluation and the announcement of winners. When the round was launched, NUPRC estimated it could attract around USD 10bn in investment, contribute up to 2bn barrels of additional reserves and eventually support production of roughly 400,000 barrels per day.

Over 600 pupils, teachers abducted despite N145bn Safe-School scheme (Punch)

IFC, Standard Chartered launch $300m finance facility (Punch)

Cocoa farmers raise concern over persistent price volatility (Punch)

Jonathan not in 2027 race, associates insist (Punch)

School abduction: Oyo Assembly rejects negotiation with bandits (Punch)

NUPRC To Commence 2026 Licencing Round In Q3 After Tinubu's Approval (ThisDay)

Senate: Abductions In Schools, Communities Alarming, Demands FG Action To Rescue Oyo Victims (ThisDay)

Owo Church Attack: Court Sentences Four Terrorists to Death by Hanging (ThisDay)

Jet fuel cost shocks hit airlines with limited hedging options - IATA (Nairametrics)

NERC unveils billing framework for excess solar power exported to national grid (Nairametrics)

• Discussions on decentralised policing are at an advanced stage
• Lawmakers are considering national state police commission, higher funding for policing

The national assembly said this week that it is awaiting an executive bill to formally establish state police in Nigeria. Lawmakers on Wednesday indicated that discussions on the decentralised policing structure are advanced, but constitutional amendment requirements mean the proposal must come from the executive branch rather than individual legislators. This follows renewed calls to lawmakers for an urgent security overhaul, after recent abductions of schoolchildren and teachers in Oyo and Borno states. Advocates of state police argue that decentralised policing will improve intelligence gathering and allow security agencies to quicker respond to threats. President Bola Tinubu has repeatedly urged the national assembly to expedite the constitutional process and he has assured governors that the initiative is now firmly on the national agenda.

Last week, senate president Godswill Akpabio revealed that the national assembly is working with president Tinubu on the constitutional framework for establishing state police. According to Akpabio, states will play a greater role in protecting lives and property while operating under a nationally regulated system. He explained that lawmakers are considering creating a national state police commission to oversee recruitment, training, promotions and operational standards. Akpabio also disclosed that the national assembly is considering increasing funding for policing by raising allocations to the Police Trust Fund from 0.5% to 1% of revenue from the federation's account, with additional contributions from state governments.

• Authorities say missiles and drones were aimed at civilian sites
• Bahrain says coordinated air defence systems intercepted incoming projectiles before impact

Bahrain's Defence Force said it intercepted and destroyed three Iranian missiles and multiple drones that were targeting what it described as civilian sites in the kingdom. Those developments come amid a further escalation of regional hostilities involving Iran and US-aligned Gulf states. The incident underscores the continued risk of spillover attacks across Gulf territories as tensions widen beyond the main conflict zones.

In a statement, Bahraini authorities accused Iran of maintaining what they described as a hostile approach through the use of missile and drone attacks against civilian infrastructure. The military warned residents to remain vigilant, avoid contact with any suspicious objects or debris, and report findings to the relevant authorities. No immediate information was released regarding casualties or material damage resulting from the interception. The development comes amid a broader escalation in regional strikes, with Iran's Islamic Revolutionary Guard Corps claiming it had targeted US military installations in Kuwait following reported American strikes on Qeshm Island in southern Iran. The exchange reflects a widening cycle of retaliation involving Iran, the United States and regional partners.

Overall, US Central Command stated that Iranian missiles fired toward Kuwait did not reach their targets, while missiles launched toward Bahrain were intercepted by US and Bahraini air defence systems. The coordinated interception highlights the integrated nature of Gulf missile defence systems amid rising regional security risks. The latest incident adds to growing concerns over the expansion of the Iran-linked conflict into Gulf airspace, with Bahrain increasingly exposed due to its strategic location and hosting of key US military assets in the region.

• Bond sale comes as rising debt, widening deficits and regional instability weigh on sovereign outlook
• Move highlights continued reliance on external financing amid tighter regional conditions

Bahrain has launched a benchmark-sized 10-year US dollar bond with initial pricing thoughts (IPTs) in the 7.5% area as the kingdom seeks to strengthen public finances amid rising debt levels, widening fiscal pressures and heightened regional uncertainty. The issuance comes as sovereign financing conditions remain sensitive across Gulf markets, with geopolitical risks and tighter liquidity conditions shaping investor demand.

The sovereign, rated B with a stable outlook by both S&P Global Ratings and Fitch Ratings, is bringing the bond under its global medium-term note programme. The transaction is targeted at institutional investors under Rule 144A and Regulation S documentation, with books opening today and pricing expected to follow subject to market conditions. Furthermore, joint lead managers and bookrunners on the deal include Bank ABC, Citi, First Abu Dhabi Bank, National Bank of Bahrain, J.P. Morgan and Standard Chartered Bank. The bond is expected to settle on Jun 10, 2026, with maturity set for June 2036. It will rank as senior unsecured debt and will be listed on the London Stock Exchange.

The issuance takes place against a backdrop of elevated regional tensions in the Gulf following the escalation of conflict involving Iran in 2026, which has disrupted trade flows, energy logistics and investor sentiment across the region. The effective closure of the Strait of Hormuz has added further pressure on shipping routes, with implications for Bahrain's oil exports, aluminium industry and broader supply chain efficiency. Against this environment, Bahrain's return to the international bond market highlights continued reliance on external financing to manage fiscal and external pressures, while investor appetite is likely to remain closely tied to geopolitical developments and oil market volatility.

• Residents of villages and towns in West Bank facing security threats will receive tax credits
• Legislation mainly benefits voters of Religious Zionism Party, Otzma Yehudit, budget cost is insignificant

The Knesset plenum approved overnight in a final reading the law that regulates granting tax benefits to settlements in the West Bank, which are under security threat. According to the legislation, residents who live in those localities throughout the tax year will be entitled to a tax credit. According to assessments, some 60 settlements will benefit from the move, where mostly religious Zionists live but there are also some settlements inhabited by ultra-Orthodox Israelis. The law enters into force retroactively as of Jan 1, 2026 and will be in force for two years. The finance minister can extend the validity of the law by up to two years each time, pending the approval of the Knesset finance committee. The legislation faced opposition as it does not cover other cities and villages, which face security threats but are not located in the West Bank. It would mostly benefit the voters of the two far-right religious parties, Religious Zionism Party of finance minister Bezalel Smotrich (who lives in one of the 60 settlements) and Otzma Yehudit. The cost for the budget would be minimal, at some NIS 130mn (about USD 35mn) annually.

• Number of foreign arrives is less than half that in May 2025
• Departures' number is about the same as in May 2025

The number of foreign tourist arrivals continued improving m/m in May but the recovery remained rather weak, according to latest data of the stat office. The number remained below 66,000 despite the ceasefires but was likely affected by the slow return of foreign air carriers and the calm fragility with fighting with Hezbollah still continuing in the north, but at lower scale. The number was lower by 48.2% y/y in May despite the low base as the arrivals last year had not recovered to pre-Gaza war levels let alone pre-coronavirus levels. Previous military conflicts have shown that it takes long for the foreign arrivals to recover.

In contrast, the number of departures of Israeli tourists were almost the same as in May last year, by only 1.5% lower despite the lower number of flights to and from Israel. The travelling of Israelis abroad more than recovered compared to the pre-Gaza war period since the number of departures in 2025 hit a record high, exceeding even the pre-coronavirus pandemic levels. We think that a fast recovery will likely take place once the geopolitical risks subside, especially at the backdrop of the expected opening of the Wizz Air hub, which should reduce the price of air tickets significantly.

• Increase likely affected by putting employees on unpaid leave due to war
• Wages rise by 4.0% y/y in April, incomes affected by widening of income tax brackets
• Employment declines in March, April in annual terms

The real average wage of salaried Israeli workers rose by 6.8% y/y in March (seasonally-adjusted data), marking the ninth consecutive increase, the stat office (CBS) reported. The increase in March was much higher than in the previous month though and should have been affected by the decrease in employment due to the war. Lower-paid workers were likely placed on unpaid leave due to the war and this effect has been in place in previous military conflicts as well as during the coronavirus period. In nominal sa terms, wages grew by 8.7% y/y in March, also much faster than in the previous month. According to the flash estimate of the CBS based on partial data, the nominal average wage (non-adjusted) rose by still strong 4.0% y/y in April and with inflation remaining at 1.9%, the growth in real wages has likely remained decent at some 2%. The disposable income of the middle class should have also been affected by the widening in the tax income brackets as of April too.

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The number of Israeli employees, also part of the survey, fell by 7.5% y/y in March after rising in all months since Jun 2024. In monthly terms, the employee jobs fell by 8.5% after a marginal rise in the month before and mostly increasing since July last year. The job positions continued falling in April, according to the new flash estimate, by much slower 1.6%, but rose by 6.4% m/m indicating a return to normality.

• Finance ministry professionals oppose move; we think it might be implemented due to elections
• Tax cut might take place by end of month, media says

PM Benjamin Netanyahu and his economic advisor Avi Simhon have reportedly approached finance minister Bezalel Smotrich urging him to consider cutting the VAT rate by 1pp to 17%, local media reported. Reducing the VAT rate by 1pp would reduce the tax revenues by NIS 8bn per year. The tax cut reportedly faces firm and broad opposition among officials within the ministry but we are not sure that Smotrich would not cave in to the pressure and implement the move in efforts to raise support ahead of the forthcoming elections. Moreover, the Smotrich' initiative to increase the VAT exemption on purchases from abroad was just defeated in the Knesset. Finance ministry professionals believe that the budget improvement does not justify cutting taxes in view of the still high defence spending and the demands of the security establishment for more funds. Media said that the VAT rate cut might be implemented by the end of the month. We recall that the government increased the VAT rate to 18% from 17% as of Jan 1, 2025 as part of its fiscal consolidation efforts.

• Ministry not to intervene artificially in exchange rate
• Media reports indicated earlier ministry considers measures to boost productivity

Finance minister Bezalel Smotrich met with finance ministry senior officials last night to discuss the effects of the NIS strengthening on the high-tech sector and ordered the establishment of a team to tackle the issue. The experts will have to formulate assistance plans for companies in difficulty, to identify operational solutions that have been raised in recent weeks as part of the ministry's work, and to work to reduce the broader implications for the entire economy, while ensuring full separation from the monetary powers of the Bank of Israel (BoI). The ministry will not intervene artificially in the exchange rate and will not use government debt as a tool to influence the foreign exchange market. Earlier in the day, finance ministry representatives met with industry officials on the issue.

Local daily Calcalist quoted finance ministry officials as saying that the finance ministry believes that the pressures behind the strong shekel are not speculative or temporary but are likely real capital flows and other developments in the economy. In May, media reported that the ministry was ruling out debt hedging to ease the shekel appreciation but was considering other tools to boost exporters' productivity.

• Rabello might be in conflict of interest between personal loyalty to Netanyahu and loyalty to public and law

The Knesset plenum elected on Wednesday Michael Rabello, the private lawyer of the Netanyahu family, as the new State Comptroller. Rabello won against retired Supreme Court Justice Yosef Elron. reports emegrged that Likud MKs had to take ohotoes to prove whom they voted for, which caused commotion during the process and opposition leader Yair Lapid said he would approach the High Court of Justice with petition regarding the legality of the procedure claiming that the secrecy of vote was violated. As a State Comptroller, Rabello will have to oversee PM Netanyahu's financial statements and a loan to a US billionaire given at Netanyahu's request and with the State Comptroller's approval, to finance his legal proceedings. This will place Rabello in a position of conflict of interest between his personal loyalty to Netanyahu and his loyalty to the public and the law, experts claim.

The State Comptroller's Office is responsible for the external control of the activities of government ministries, the local government, the public bodies, and supervises the management of the financial affairs of the parties and parties. The State Comptroller safeguards the public's interests concerning government bodies.

• Hezbollah militants to end fire completely, to withdraw north of Litani river
• We have not seen any report confirming Hezbollah has agreed to conditions

Israel and Lebanon have agreed to enforce the ceasefire reached between Israel and Iran-backed Hezbollah at the middle of April, the US state department announced in a statement on Wednesday. Despite the truce, the hostilities have continued until now with a new more significant escalation barely avoided earlier this week after a call between PM Benjamin Netanyahu and US president Trump. According to the agreement, Hezbollah should stop fire completely and all its operatives are to move north of the Litani River. Also, pilot zones would be established that would be clear from the presence of non-state actors and would be exclusively controlled by the Lebanese army. The agreement was reached between Israeli and Lebanese officials during talks in the US, which Israel hopes will result in normalising the relations between the two neighbours. Hezbollah does not recognise the talks with Israel and we have not seen any report to confirm that it has agreed to implement the ceasefire and withdraw from the southern Litani sector.

What Israel's Upcoming Election Means for the World (Haaretz)

Haredim Storm Home of Israeli Supreme Court Judge Over IDF Draft Arrests (Haaretz)

Israel, Lebanon agree to ceasefire, as Trump claims Iran deal could be reached by weekend (Jerusalem Post)

Trump's absurd assertions of responsibility for Israel's existence clash with reality (Jerusalem Post)

Defense Ministry sees progress in battle against Hezbollah's fiber-optic drones (Jerusalem Post)

Israel and Lebanon agree on ceasefire - on condition that Hezbollah stops firing (Calcalist)

Buyers are waiting on the fence until there is real relief in the housing market (Calcalist)

Netanyahu's lawyer Michael Rabillo elected State Comptroller (Calcalist)

The slowdown in apartment sales has also reached the big ones. Who handled it better? (TheMarker)

Netanyahu is again trying to bribe voters - and proposes lowering VAT to 17% (TheMarker)

US State Department: Israel and Lebanon have agreed to implement ceasefire (TheMarker)

At the end of the round of talks: Israel and Lebanon agreed on a full ceasefire (Globes)

What is expected for the dollar in the coming months and will the Bank of Israel intervene? (Globes)

A lifeline for high-tech? The Ministry of Finance is examining granting grants and paying taxes in dollars. (Globes)

• Some NIS 40.9mn tax collected thus far with 3 more months to go while NIS 2-3bn expected
• Experts attribute low collection to lack of anonymous disclosure track

The latest voluntary disclosure procedure launched by the Tax Authority, which grants immunity from criminal proceedings for those who reveal their hidden capital, is reportedly disappointing thus far, according to data obtained by local business daily Globes. Since the publication of the procedure, 289 disclosure requests have been submitted to the Tax Authority, with the reported capital amounting to NIS 676.5mn, and the tax due on the amount estimated at NIS 40.9mn. At the same time, the Tax Authority had expected NIS 2-3bn, mainly from taxing crypto profits. Experts quoted by Globes explained that the low amount is due to the lack of an anonymous disclosure track that allows anonymous applications that has been present in similar disclosure procedures in the past. The current procedure is to end on Aug 31 and includes fast "green" track for reporting small amounts, including cryptocurrency profits. There were two such procedures in the past in 2011-2012 and in 2014-2016 plus 2017-2019 (one framework from 2014 through 2019), in which 9,000 cases were handled and collection reached some NIS 5bn in total.

• Current policy rate: 3.75%
• Next monetary policy meeting: Jul 7, 2026
• Expected decision: On-hold, 25bps cut possible

The MPC cut the policy rate by 25bps to 3.75% on May 25 but maintained a rather hawkish tone, which was interpreted by some as a defence why it did not implement a steeper easing. The press release and comments of BoI officials after the announcement stressed on still existing risks and deputy governor Andrew Abir insisted that the geopolitical uncertainties required a gradual monetary easing. However, just over a week passed and BoI governor Amir Yaron softened the tone significantly and suggested that the monetary easing might be faster and larger if inflation expectations continue declining and approach the lower end of the 1-3% target range. Yaron said that the situation has changed in the week that passed since the rate was cut with the likelihood for a deal with Iran increasing that affected energy prices, Israel's risk premium and the forex rate - all in the direction of lower inflation. Thus, we now believe that both a rate cut and an on-hold decision are possible in the next rate-setting sitting on Jul 7. There would be more clarity on the next move after the May inflation release (Jun 15) and the inflation expectations release (Jun 18), we think.

Data Download

Before the rate decision sitting Abir commented that the research department assumption for two rate cuts by March 2027 (one more apart from the May 25 cut) is still valid and after the meeting BoI governor Amir Yaron confirmed that the new forecast (to be announced in July) would not be much different. However, the change in the rhetoric confirms our expectations that the monetary easing might eventually be larger and reach some 75bps by March next year. Yaron warned after the rate cut that conditions might change very fast and assessed that the MPC is not on a path pointing to a definite monetary easing but it seems that the change in conditions actually pointed in the opposite direction - towards faster and more rate cuts.

Inflation stabilised at 1.9% y/y in April remaining at the mid-point of the 1-3% target range for the fourth consecutive month and within the band ever since August. Inflation surprised positively for the second consecutive month in April and both Yaron and Abir confirmed that this was the main factor backing the May rate cut. The developments took place at the backdrop of a sharp shekel appreciation that seems to have offset the effects of the higher oil prices, which full impact was expected to be first seen in the April prints. The press release says that inflation is to increase in the coming months but to remain around the mid-point of the target and Abir later on commented that inflation was not expected to exceed the upper end of the target (3%) even in case of a shock.

GDP declined by 3.3% in saar terms (seasonally-adjusted annualised rate) in Q1, which is higher than the expectations of the finance ministry from end-March (2.5% saar decline) but the BoI said it was lower than expected and lower than the economic contraction in Q2 2025 when the previous war with Iran took place. GDP level was by about 4.5% lower than its long-term trend would indicate, the BoI assessed. A recovery has already started in Q2 with credit card purchases recovering and slightly exceeding their long-term trend line, stability in exports and recovery starting in imports as of April, according to the BoI. Credit continued expanding, the risk premium declined close to pre-Oct 7 2023 levels, and equity indices continued increasing. The labour market was impacted significantly by the war but has already started recovering slightly. Thus, the economy does not seem to need support by rate cuts and the major determinant will remain inflation and the security situation, in our opinion. Yaron ruled out intervention on the forex market for now urging the government to aid exporters instead and Abir suggested that this might happen once inflation approaches 1%.

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

• Growth forecast revised lower as regional instability and weaker external conditions weigh on outlook
• Institution expects Jordan's economic growth to accelerate to 2.8% in 2027

The EBRD projects that Jordan's economy will grow by 2.6% in 2026, representing a downward revision of 0.2pps compared with the bank's February outlook, according to the latest Regional Economic Prospects report. Growth in 2027 is expected to reach 2.8%, also slightly lower by 0.1pps versus the previous forecast. The revisions reflect a more cautious assessment of the regional and external environment, with geopolitical tensions and trade-related disruptions weighing on the medium-term outlook.

The downgrade comes after a period of relatively stable performance, with Jordan's economic growth accelerating from 2.5% in 2024 to 2.8% in 2025. The improvement in 2025 was driven by a recovery in tourism and resilient export performance, despite ongoing global trade policy uncertainty. Inflation edged higher in March 2026 to 1.9% following a spike in global oil prices, highlighting the sensitivity of domestic prices to external energy shocks. The report notes that Jordan experienced temporary disruptions to natural gas supplies following the outbreak of conflict in the Middle East, although these were quickly resolved. Strong fuel reserves helped prevent major disruptions to economic activity, underscoring the country's short-term resilience to external supply shocks.

However, structural vulnerabilities remain significant. The budget deficit stood at 5.2% of GDP in 2025, while gross general government debt, including guarantees, reached 108% of GDP. The current account deficit also widened to 5.6% of GDP due to higher import costs, reflecting the country's continued dependence on external supplies in an inflationary global environment.

Looking ahead, growth is expected to moderate as regional instability weighs on tourism, investment and trade flows. The EBRD warns that higher food and energy import costs, combined with ongoing geopolitical uncertainty, could further pressure external balances. While growth is projected to recover modestly in 2027, this remains contingent on an easing of regional tensions, with Jordan's high import dependence continuing to represent a key vulnerability to external shocks.

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• Agreement envisages Hezbollah's withdrawal from south of the Litani River and expanded Lebanese army control

Israel and Lebanon have agreed to implement a ceasefire following two days of US-mediated negotiations in Washington, marking the most significant diplomatic breakthrough since the latest escalation between Israel and Hezbollah. The agreement signals a broader effort to reshape the security architecture of southern Lebanon by strengthening state control and reducing the influence of non-state armed groups, while creating a framework for longer-term normalisation between the two countries. Under the understanding reached during the fourth high-level trilateral meeting, the ceasefire is conditioned on a complete halt to Hezbollah attacks and the withdrawal of the group's operatives from the area south of the Litani River. The arrangement reflects longstanding Israeli security demands and forms part of a wider roadmap aimed at preventing the re-emergence of armed non-state actors along the border.

A central element of the agreement is the planned establishment of pilot security zones in southern Lebanon where the Lebanese Armed Forces will assume exclusive control of territory. The initiative is intended to gradually expand the authority of the Lebanese state and reduce the security vacuum that has historically enabled Hezbollah to maintain a strong military presence near the Israeli border. The two sides also committed to continuing direct negotiations under US mediation to address outstanding political and security issues. Discussions focused on a broader framework designed to safeguard the sovereignty, security and territorial integrity of both countries, while laying the groundwork for a more comprehensive peace and security agreement.

The joint statement also reflected a coordinated regional stance against Iranian influence. Participants condemned attacks carried out by Iran and criticised activities viewed as destabilising the Middle East through support for proxy groups and other forms of regional intervention. The emphasis on Hezbollah's disarmament and the expansion of Lebanese state authority highlights the extent to which the ceasefire initiative is linked to wider efforts to curb Tehran's influence in Lebanon. For Lebanon, the agreement offers a potential path toward greater stability after months of conflict that have inflicted significant economic and infrastructure damage. However, implementation is likely to prove challenging, particularly given Hezbollah's entrenched position within the country's political and security landscape. The success of the ceasefire will depend largely on the ability of the Lebanese Armed Forces to expand their operational presence and on sustained international support for state institutions.

The parties agreed to resume political and security talks during the week of June 22, with the objective of advancing toward a comprehensive bilateral agreement. While the ceasefire represents an important step toward de-escalation, its durability will ultimately depend on developments on the ground and the willingness of all actors to adhere to the commitments reached in Washington.

• Forecast cut by 6.0pps as renewed conflict and infrastructure damage weigh on outlook
• Recovery in 2027 expected only if stability returns and reconstruction efforts advance

The EBRD has sharply revised down its outlook for Lebanon, projecting the economy to contract by 2.0% in 2026, a downward revision of 6.0pps compared with its February forecast. Growth is then expected to rebound to 4.0% in 2027, assuming a stabilisation in security conditions and progress towards peace, according to the latest Regional Economic Prospects report. The revision reflects a significantly deteriorated economic and security environment, driven primarily by renewed hostilities with Israel and their broader economic spillovers.

The downgrade comes after a volatile recent performance, with Lebanon's economy contracting by 7.5% in 2024 before returning to estimated growth of 3.5% in 2025, supported mainly by a partial recovery in tourism. Despite this rebound, macroeconomic imbalances remain severe, with the current account deficit widening to 22.5% of GDP in 2025 and the fiscal deficit increasing to 3.3% of GDP as revenue mobilisation remained weak. The escalation of the conflict in 2026 has significantly worsened conditions on the ground, particularly in southern Lebanon, where widespread infrastructure damage and displacement have disrupted economic activity. More than 1.3 million people have been displaced, amplifying pressures on public services and weakening domestic demand. At the same time, global energy price pressures have added to domestic strain, pushing inflation to 17.3% in March and increasing reliance on costly private power generation amid continued weaknesses in the national electricity grid.

Looking ahead, the economy is expected to remain in contraction in 2026 as the effects of conflict continue to weigh on output. The EBRD notes that recovery in 2027 is contingent on the restoration of stability, with risks tilted to the downside in the event of further escalation, delays in reconstruction, or limited progress on structural reforms needed to unlock international financial support.

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• Output and new orders continued to decline, but at slowest pace for past three months
• Employment fell at the fastest rate in more than five years as firms continued to face cost pressures
• Business confidence remained pessimistic as firms cited war-related uncertainty and weak investment prospects

Lebanon's Purchasing Managers' Index (PMI) rose to 49.7 points in May, up from 48.2 in April, reaching a three-month high and signalling a much slower deterioration in private sector business conditions. Although the reading remained below the 50.0 neutral threshold for a third consecutive month, the gap narrowed significantly, indicating that the contraction in economic activity was only marginal. The improvement suggests that businesses are gradually adapting to a challenging operating environment marked by regional instability, weak demand and elevated costs.

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Private sector output continued to decline during May, extending the current contractionary period to three months. Surveyed firms attributed lower activity levels to the ongoing conflict in the region, subdued demand and persistent cost pressures. However, the pace of decline eased considerably compared to previous months, with both output and new orders recording their weakest contractions in three months. This points to a partial stabilisation in domestic business conditions despite the difficult economic backdrop.

Demand remained the main constraint on growth. New business inflows continued to decrease as uncertainty, insecurity and weak market conditions weighed on customer spending. Export markets remained particularly fragile, with foreign demand contracting sharply for another month as the regional conflict continued to disrupt trade and discourage international clients. Nevertheless, the decline in export orders was substantially less severe than in April, contributing to the overall improvement in the headline PMI reading. Furthermore, labour market conditions deteriorated further as companies responded to weak order books and rising costs by reducing staffing levels. Employment fell at the fastest pace in nearly five and a half years, although the overall rate of job shedding remained modest. The development highlights the growing pressure on firms to contain costs amid a prolonged period of subdued demand and limited business expansion opportunities.

Looking ahead, business sentiment remained firmly pessimistic. More than half of surveyed companies expect activity to decline over the next 12 months, reflecting concerns about a potential escalation of the regional conflict, particularly in southern Lebanon. Uncertainty surrounding reconstruction efforts and investment activity also weighed on expectations, suggesting that while business conditions have shown tentative signs of stabilisation, the outlook for Lebanon's private sector remains challenging in the absence of an improvement in the regional security environment.

• New strategic scenario raises ambition to MAD 200bn in tourism receipts by 2030

The government considers revising its tourism strategy toward 30mn arrivals by 2030, Media24 reported, referring to an unnamed official source. The upward revision comes as stronger-than-expected growth puts the existing 26mn visitor target, set for 2030, within reach as early as 2028. The current trajectory of arrivals and tourism revenues has consistently exceeded assumptions embedded in the existing roadmap, prompting policymakers to reassess the medium-term outlook. The 26mn visitor target is now widely seen in policy and industry circles as achievable ahead of schedule, supported by sustained momentum in inbound tourism and stronger-than-expected revenue generation over the past three years. In response, authorities are examining a more ambitious scenario that would raise the target to around 30mn arrivals by 2030, alongside tourism receipts approaching MAD 200bn.

Total tourist arrivals climbed to 19.8mn by end-December 2025, up 14% y/y and marking the strongest performance ever recorded, according to the tourism ministry. Tourist arrivals increased 7% y/y to 4.3mn in Q1 2026, according to data from the tourism ministry. The surge was supported by a sharp acceleration in March, which alone brought in 1.6mn visitors, an increase of 18% y/y. The strong end to the quarter confirms continued recovery and highlights Morocco's rising appeal despite a volatile global backdrop. The tourism sector, along with services exports and remittances, has been a solid source of FX income for Morocco over the past couple of years, helping maintain stability of the dirham despite steadily rising imports.

• Higher energy prices are expected to lift inflation to 3.2% in 2026, keeping rates unchanged in 2026-27
• Current account deficit is projected to widen to 3.1% in 2026 and 3.3% in 2027

The OECD projects to grow by 5.0% in 2026 and 3.9% in 2027, following expansion of 4.6% in 2025, according to the its latest Economic Outlook released on Wednesday. The acceleration in 2026 is expected to be driven by a strong rebound in agricultural output after abundant winter rainfall replenished water reservoirs, alongside continued public investment in major infrastructure projects. Agricultural production is forecast to increase by around 15% in 2026 before normalising in 2027. Private consumption is expected to remain resilient despite a temporary rise in inflation caused by higher food and energy prices, while infrastructure spending continues to support growth in manufacturing and construction.

Inflation is projected to rise from 0.7% in 2025 to 3.2% in 2026 as the energy price shock feeds through to domestic prices, before easing to 1.4% in 2027. Against this backdrop, the central bank is expected to keep its policy rate unchanged at 2.25% throughout 2026-27, pausing its previous easing cycle.

Fiscal consolidation is set to continue despite rising public expenditure. The fiscal deficit is projected to stabilise at around 3.0% of GDP in both 2026 and 2027 as stronger tax revenues, supported by recent tax reforms and robust economic activity, offset higher spending on infrastructure and social protection programmes. The external position is expected to weaken somewhat over the forecast horizon. The current account deficit is projected to widen from just above 2% of GDP in 2025 to 3.1% in 2026 and 3.3% in 2027, largely reflecting higher energy import costs. Morocco remains vulnerable to external shocks given that it imports around 90% of its energy needs and relies heavily on European markets, which account for roughly 60% of goods exports. A further escalation in global trade tensions or a prolonged conflict in the Middle East could weigh on exports, raise import costs and disrupt supplies of ammonia and sulphur used by Morocco's fertiliser industry. However, Morocco could also benefit in the short term from higher global demand for phosphate-based fertilisers if exports from competing producers are disrupted.

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Saudi Kingdom Holding updates valuation of SpaceX stake (Zawya)

AI shaping future of private sector in Arab world, highlights seminar (Zawya)

Kepco secures USD 1.4bn Saudi cogeneration project from Aramco (Zawya)

Georg Fischer opens new commercial office in Riyadh (Zawya)

IMF predicts slower-growing but resilient Saudi economy (AGBI)

Saudi Foreign Minister Holds Talks with Jordanian FM, Receives Message from South Korean Counterpart (Asharq Al Awsat)

Saudi, Qatari FMs Discuss Regional Developments (Asharq Al Awsat)

• Economy supported by domestic demand, underpinned by stable public employment, government spending, investments
• GDP growth could slow to 2% and CPI inflation is expected to quicken to 2.3% this year, IMF warns

Despite the Middle East conflict, Saudi economy is demonstrating agility and resilience, supported by robust and diversified infrastructure and the government's efforts to reroute oil exports via the Red Sea, an IMF team said at the conclusion of an Article IV mission. Moreover, Saudi Arabia's strong fundamentals - low government debt, ample reserves, and a large sovereign wealth fund - provide important buffers. Non-oil activity, which has become a key driver of the economy, is expected to be supported by domestic demand, underpinned by stable public employment, government spending, and the steady execution of private and public capital projects, the IMF team said.

The geopolitical situation remains highly uncertain with notable downside risks. The main risk is an escalation of the conflict, which could further impair shipping routes, damage energy infrastructure with associated output losses, and heighten uncertainty and financial sector risks, the IMF warned. Beyond near-term effects, a prolonged conflict could erode investor confidence and weaken medium-term growth and diversification prospects. The IMF also warned that GDP growth could slow to 2% this year and added that consumer inflation is expected to quicken to 2.3% due to higher shipping and insurance costs. On a positive note, higher oil prices are expected to offset volume losses, generating a windfall that would reduce the twin deficits, while the USD-SAR peg provides a credible monetary policy anchor and helps underpin financial stability. Should the shock prove more prolonged, Saudi Arabia has the space to loosen the fiscal stance to cushion the economy, with support to affected businesses and households that should be temporary, targeted, and transparent, the IMF said.

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• BCT cites exogenous upside risks on domestic inflation and pledges to remain vigilant
• Current account narrows to 1.5% of GDP in Jan-Apr (1.7% a year prior) thanks to services and remittances inflows offsetting wider trade deficit

The Central Bank of Tunisia (BCT) kept its key interest rate unchanged at 7.0% at its board meeting on Wednesday (Jun 3), maintaining a prudent policy stance amid resurfacing inflationary pressures and elevated global risks. The decision reflects the bank's view that uncertainty remains unusually high due to the geopolitical tensions in the Middle East which affect global commodity and food markets. The domestic inflation backdrop is relatively contained but starts to become less comfortable for the central bank. Headline CPI growth accelerated to 5.5% y/y in April from 5.0% in March, mainly due to a sharper increase in fresh food prices, which rose 13.3% y/y. Core inflation also strengthened to 5.0% from 4.8%, suggesting that underlying pressures are becoming more persistent. Administered-price inflation remained contained at 1.0%, helped by the continued freeze on key commodity prices.

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The BCT noted that economic growth remained relatively resilient in early 2026, with GDP expanding by 2.6% y/y in Q1. Although this was slightly below the 2.7% y/y recorded in the previous quarter, it was still well above the 1.6% growth seen a year earlier. The expansion was supported by services, agriculture and parts of industry, although construction continued to weigh on activity.

The external position remained broadly supportive as current account deficit narrowed to TND 2.73bn (1.5% of GDP) in Jan-Apr from TND 2.96bn, or 1.7% of GDP, a year earlier. Stronger services receipts and remittances helped offset the impact of a wider trade deficit mostly due to the higher energy bill. Excluding energy, the current account posted a surplus of TND 1.46bn, double the TND 726mn surplus recorded a year earlier. Foreign exchange reserves improved, reaching TND 25.5bn, equivalent to 104 days of imports as of Jun 2, compared with TND 22.6bn and 98 days a year earlier.

While the hold signals that the central bank does not currently see a need for additional tightening, the statement emphasised that external inflationary pressures have increased and could pass through to domestic prices. The bank said it would continue to monitor economic, monetary and financial developments closely and remains ready to take appropriate measures depending on the inflation outlook.

• Etu move to match Energean bid puts Chevron Angola asset sale into uncertainty amid pre-emption dispute

Domestic oil firm Etu Energias has exercised its pre-emption rights on Chevron's Block 14 assets, Reuters reported. In March this year, Chevron said it had reached an agreement with Greek Energean to sell a 31% operated stake in Block 14 and a 15.5% non-operated stake in Block 14K for USD 260mn. Etu has notified Chevron that it intends to match Energean's offer, potentially displacing the Greek producer from the transaction. Any transfer to Etu must occur on the same terms as Energean's agreement, including proof that the buyer operates a producing deepwater asset in water depths above 300m. The dispute complicates Energean's strategy to diversify away from its Eastern Mediterranean gas portfolio, where operations have been disrupted by regional conflict.The outcome will be closely watched as a test of Angola's upstream investment framework and could influence the pace of foreign investment into the sector. The assets in question, located offshore Angola, currently produce about 42 kbbl/d of oil in total, equivalent to roughly 13 kbbl/d net to the interest being acquired. The portfolio generated around USD 119mn in adjusted EBITDAX in 2025.

• Fund says economic activity remains robust despite Middle East war shock, with output, exports, reserves and revenue still improving through early 2026
• Risks to the outlook have risen as higher import costs hit fuel and fertilizer, though the impact on growth and inflation has so far been modest
• Authorities are urged to sustain tight monetary policy, improve FX market transparency and keep fiscal discipline intact
• Fund says restructuring talks with official creditors are advancing as expected, while discussions with bondholders are continuing
• Total IMF support under the USD 3.4bn program would rise to about USD 2.65bn once the review is approved

The International Monetary Fund (IMF) staff team and the Ethiopian authorities reached a staff-level agreement on economic policies to conclude the fifth review of the country's four-year Extended Credit Facility (ECF) arrangement, according to a statement released by the Fund. Subject to approval by IMF management and the Executive Board in the coming weeks, the review would unlock about USD 468mn, bringing total IMF financial support under the program so far to around USD 2.65bn. The IMF noted that Ethiopia has continued to make progress under its Homegrown Economic Reform Agenda, with favorable macroeconomic outcomes holding through to the onset of the war in the Middle East.

Program performance appears to have remained broadly positive, with output indicators, exports, reserves and government revenue all improving through early 2026, alongside lower inflation. The Fund said the war in the Middle East created a significant external shock by disrupting trade and driving up the cost of imported fuel and fertilizer, while also causing temporary fuel shortages. Even so, economic activity remains robust, with only modest effects so far on output growth and consumer price inflation. That resilience notwithstanding, the IMF warned that risks to the economic outlook have increased materially. Global uncertainty has risen since the conflict began, and commodity price volatility has made the external environment less predictable. The Fund said the balance of risks remains manageable if the shock proves temporary, but higher import costs and a more volatile backdrop call for careful resource management and nimble policy responses to preserve the authorities' capacity to respond should pressures intensify.

On the policy front, the IMF said maintaining a tight monetary stance remains appropriate to anchor inflation expectations. It also stressed the need to keep improving the functioning and transparency of the foreign exchange market to support external adjustment. On the fiscal side, continued domestic revenue mobilization and prudent expenditure management were highlighted as essential to safeguarding fiscal sustainability while accommodating new spending pressures. The Fund added that structural reforms will be needed to strengthen the foundations for private sector-led growth. In that regard, the IMF said priorities include improving the business climate, reinforcing financial sector resilience and deepening market reforms to boost competition and efficiency. The Fund also welcomed ongoing progress toward a comprehensive external debt treatment that would restore debt sustainability. According to the statement, restructuring talks with official creditors are advancing as expected, while discussions with bondholders are continuing. We recall that the fourth review unlocked USD 261mn and lifted total disbursements under the USD 3.4bn program to about USD 2.18bn. The latest staff-level agreement extends that support pipeline, but final approval will depend on the Executive Board and on continued policy delivery.

• President confirmed an official visit to France in July 2026
• President said 2025 withdrawal of French troops followed request initiated by France

President Brice Clotaire Oligui Nguema believes that negotiations with the IMF will conclude successfully once an audit of the country's public debt is completed. He said the audit is a necessary step before Gabon can enter a new financial support program. The ongoing audit is expected to be completed by July 2026. Nguema was speaking in an interview with France24 this week, where he also described ties with Paris as excellent and announced an official visit to France on July 20. According to sources, his visit will focus on economic cooperation, environmental issues, the Congo Basin forests, training programs and security matters. Commenting on France's changing military presence in Gabon, Nguema said the 2025 partial withdrawal of French forces from Camp de Gaulle in Libreville followed a request from France itself.

On other international issues, Nguema disclosed that he had rejected a US proposal for Gabon to accept migrants deported from the United States because such an arrangement would not be in the country's interest. On domestic issues, Nguema dismissed ongoing allegations of torture made by Sylvia Bongo (wife of former president Ali Bongo Ondimba) after she and her son were detained in the wake of the 2023 coup. Addressing speculation about a possible transfer of power within his own family, the president firmly rejected the idea of a political dynasty. He said Gabon's new constitution limits presidential terms and prevents direct succession from father to son. The president also discussed the nationwide suspension of social media platforms that occurred in February 2026 and said the decision was taken by the communications regulator and will not be permanent.

• Libreville Court of Appeal rejected bid to nullify legal proceedings against him
• President Brice Clotaire Oligui Nguema denies any political interference

Gabon's main opposition leader Alain-Claude Bilie-By-Nze will remain in detention after the Libreville Court of Appeal rejected his appeal on June 2 to nullify the legal proceedings against him. Detained since April 16, former prime minister Bilie-By-Nze faces investigation for alleged breach of trust and fraud relating to a government cultural festival in 2008. His legal team argues that the charges are time-barred and should no longer be prosecutable. They also describe the continued detention as arbitrary and in violation of Gabonese fair trial standards. The ruling has raised concerns over judicial independence and political freedoms in Gabon because Bilie-By-Nze was arrested after publicly criticising the government over its nationwide suspension of social media in February. He also previously criticized the administration because of its recent reforms to nationality laws which now separate Gabonese citizens by origin, adoption or affiliation. While the opposition party condemns Bilie-By-Nze's arrest as politically motivated, president Brice Clotaire Oligui Nguema has denied any executive interference and said the matter is purely judicial.

Don't hand mines to Ghanaians on sentiment - Steve Manteaw warns gov't (Joy FM)

Mahama right to seek legal advice on Anti-LGBTQ bill - Christian Council (Joy FM)

Businesses demand cheaper credit after Reference Rate drops to 10.02% (Citi Newsroom)

Avoid speculation, support cedi stability - BoG tells businesses (Citi Newsroom)

Wontumi trial: Court to deliver judgment on July 3 (Daily Graphic)

Let's increase investment in rice sector - Vice-President urges West African countries (Daily Graphic)

Supreme Court dismisses IMANI's case challenging President's appointments of IGP, Director of Prisons others as lacking merit (Starr FM)

Ghana emerges as 4th freest country in Africa and 46th in the World (Class FM)

• Growth projection is higher than 4.8% on which 2026 budget was based
• Improved outlook reflects strong gold and cocoa exports, agriculture and services activity
• Finance minister expects inflation to end year at 5%, lower than previously projected 8%

The government revised its growth forecast for this year and now expected GDP to expand by 6.0%, up from the 4.8% projection on which the 2026 budget was based. Finance Minister Cassiel Ato Forson told Bloomberg that the economy is growing faster than previously expected as businesses benefit from lower inflation and interest rates as the fiscal discipline and forex inflows help offset the impact of the Middel East conflict. Forson said that the improved outlook was supported by the activities in the agriculture and services sector as gold and cocoa exports continued growing, noting that growth could pick up into double-digit territory if agreed investments with oil and gas partners (USD 3.5bn) materialise. As for the country's external position, the minister said that higher reserves should help the country withstand external shocks and inflation should end the year at 5.0%, below previously expected 8.0%. We note that external reserves rose to USD 14.5bn in February from a level of below USD 10bn a year earlier thanks to strong gold exports. The reserve stock has since eased but remains strong at USD 13.9bn.

• Food inflation accelerates to 3.3% y/y as prices of many items rise
• Transport prices rise at slower pace due to higher fuel prices
• Central bank left rate on hold in May, expecting inflation to rise within 6-10% target band over near term
• However, finance minister says eop inflation is now expected at 5%, down from previous 8%

CPI inflation accelerated to 3.7% y/y in May from 3.4% y/y in April, driven mainly by higher food prices. The print was below the 4.3% consensus forecast (Bloomberg). Food prices were the main driver of overall inflation, rising by 3.3% y/y in May vs. 2.2% y/y in April. Acceleration reflected higher prices of items such as tomatoes, plantain, ginger, and rice. At same time, non-food inflation eased to 4.1% y/y from 4.2% as the pickup in some categories was offset by slowdown in others.

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Transport inflation remained negative at -2.8% y/y but the decline eased from -3.4% y/y in April as a result of movement in fuel prices. Diesel price grew at a faster pace and petrol price decreased at a slower rate, in both cases due to base effect as prices were little changed in m/m terms in May after the government introduced relief measures. Prices should rise more markedly in June as the relief measures were eased. Education inflation picked up too, which was due to a hike in secondary school fees.

Almost all other categories posted slower growth, but as in April, in many cases this was due to base effect as prices rose in m/m terms. The headline CPI rose by 1.1% m/m in May, slightly up from 1.0% in April, as food prices increased at a faster pace of 2.0% m/m (0.8% in April) while non-food prices eased to 0.4% m/m (1.1% in April).

The CPI data further confirmed the rising inflationary pressures in response to the increase in fuel and food prices, and the pressure on the local currency. These risks led the central bank to keep the rate unchanged at its MPC meeting last month citing the balanced inflation and growth risks. The central bank expects inflation to pick up to within the medium-term target band (6-10%) with upside risks including a protracted Middle East crisis, which could keep crude oil prices above USD 100 per barrel and raise the prospect of pass-through into domestic transport and utility costs. Still, finance minister Cassiel Ato Forson told Bloomberg the government expects inflation to end the year at 5.0%, below previously expected 8.0%.

• Government has concluded negotiations with Petrobras which expressed interest in nine blocks last year
• Deals will bring total occupancy rate of Ivorian sedimentary basin to 75%

The government will sign production sharing contracts with Brazil's Petrobras on oil blocks CI-513, CI-600, CI-601, CI-602, CI-603, CI-605, CI-701 and CI-702, according to the statement release after the cabinet meeting on June 3. This follows the completion of negotiations with the company, the government explained, adding that the deals would bring the total occupancy rate of the national sedimentary basin to 75%.

We recall that Petrobras submitted a declaration of interest for nine offshore exploration blocks in Ivory Coast last year as a first step in the process of acquiring assets in the country. Those blocks included CI-700, but it was not included in the contracts to be signed. No information has been provided on Petrobras's investment plans.

Ivory Coast has seen an increase in investments in the mining sector, in particular in oil and gold mining, thanks to new discoveries. National oil production grew by 42.5% y/y to 23mn barrels in 2025, translating into daily output of about 63,000bpd. This is expected to grow further with the government projecting oil output of at least 500,000bpd by 2035 thanks to new discoveries and projects.

• It is based on average GDP growth of 6.8% during three-year period
• Government projects fiscal deficit of 3.5% of GDP in 2027, to be lowered to 3% again in 2028
• Budget size to increase by 6.4% to XOF 18,466.1bn in 2027

The government at its meeting on June 3 approved the Multi-Year Budgetary and Economic Programming Document (DPBEP) 2027-2029 which sets the budgetary and economic guidelines and fiscal objectives for the next three years. The government statement said that the document is based on average GDP growth projection of 6.8% over the 2027-2029 period. It envisages continued strengthening of domestic revenue mobilisation, rationalization of expenditures and control of public debt, strengthening of capital expenditures and fight against poverty. It thus projects a fiscal deficit from 3.5% of GDP in 2027 to decrease to 3.0% in 2028 and 2029. The government did not provide further details, but media reports said that the budget envelopes for the period were set at XOF 18,466.1bn for 2027, up 6.4% from XOF 17,350.2bn in 2026, and further at XOF 20,485.3bn in 2028 and XOF 22,315.8bn in 2029.

We note that the IMF team that reached a staff-level agreement on the latest reviews of the country's programme last month said that the fiscal deficit could widen beyond the targeted 3% of GDP depending on the evolution of the Middle East conflict. The deficit was lowered to 3% last year, in line with the UEMOA norm, and was projected to remain at this level over the medium term, but pressures have emerged related to higher energy and food prices.

• Govt to acquire 15% stake bringing its total share to 25%
• Value of acquired shares is USD 6.2mn
• Acquisition comes amid rising nickel prices

The government approved the acquisition of additional shares in the leading nickel mining company Compagnie Minière du Bafing (CMB). The government will acquire additional 1,500 shares raising its stake to 25% from previous 10%. State-owned company SODEMI holds additional 5% which remains unchanged. The total value of the shares is XOF 3.5bn (USD 6.2mn), the government said. We note that previously these shares were held by IC Nickel Ltd. The CMB operates the largest DSO (Direct Shipping Ore) nickel project in Africa, including the Foungbesso and Moyango open-pit mines. Its majority shareholder is Netherlands-based CoreX Holding.

The acquisition comes amid a rally in nickel prices which have increased by over 30% since mid-December 2025. CMB reported a loss of XOF 6.3bn in 2024, worsening markedly from a XOF 287mn profit in 2023, as its revenue fell by 43% to XOF 31.7bn as a result of a drop in production volumes and prices, in turn reflecting lower global demand for nickel. The volume of extracted ore fell by 43% to 1.48mn tonnes and exports fell by 40% to 1.36mn tonnes.

• Govt approves USD 19.5mn loans, USD 1.9mn grant for climate resilience project
• It also approves USD 53mn loan from BOAD for road construction project

The government at its meeting on June 3 approved several financing agreements envisaging investment of over USD 72mn. It approved two loan agreement with AfDB for a total of USD 19.5mn including a USD 12.6mn loan under the Forest Investment Program (FIP) and a USD 6.9mn loan from African Development Fund. The loans are provided for a period of 30 years with a five-year grace period and 1% interest rate. The government also approved a FIP grant agreement in the amount of USD 1.9mn. The agreements were signed on Mar 13 as additional financing for the Integrated Programme for Development and Adaptation to Climate Change in the Niger Basin (PIDACC/BN). The project aims to improve the country's climate resilience and preserve the ecosystems of the Niger Basin by reducing the siltation of the river, supporting forest cover recovery and promoting agricultural value chains.

The government also approved a XOF 30bn (USD 53mn) loan agreement signed with the West African Development Bank (BOAD) back in May 2024 for the partial financing of the project for the construction of the Kobo-Kanawolo section (47.3 km) of the Northern Highway.

• Demand remains below KES 40.0bn target
• Two more auctions were held earlier this month

The Central Bank accepted a total of KES 34.4bn of 9- and 17-year T-bonds in the auction, held on Wednesday (3 June), according to the outcome published by CBK. The 9-year bond received bids worth KES 20.2bn, while the 17-year bond attracted bids worth KES 14.2bn. Total bids thus came in at KES 34.4bn, below the KES 40.0bn pre-announced target. CBK accepted almost all bids on both papers. The weighted average accepted yield came in at 13.31% for the 9-year bond and 14.23% for the 17-year bond.

According to the results, no repayments are falling due, and the all of the funds will be allocated towards budgetary support. In our calculations, gross bond issuance since the start of the FY reached KES 1,162bn with this auction, and net issuance - KES 865bn. In government's latest projections, net domestic financing is seen at about KES 974bn (5.1% of GDP) in the current fiscal year, ending June.

• Seeks KES 2.6bn for Ebola preparedness measures
• Funding aimed at readiness for first 100 potential cases

The government will proceed with plans to establish an Ebola quarantine and isolation facility at Laikipia Air Base despite public opposition and ongoing legal challenges, health minister Aden Duale said, cited by the local media. Public participation is not required under existing health legislation, Duale reportedly said. The proposed facility forms part of Kenya's preparedness measures against a potential Ebola outbreak and that the government has a responsibility to act before infections are detected, Duale said, adding quarantine and isolation facilities could also be established at other military installations across the country if necessary. Such centres would be available to both Kenyan and foreign patients, including US citizens.

The minister's remarks come after the High Court temporarily halted the establishment and operation of Ebola-related quarantine facilities under arrangements involving foreign governments pending the hearing of a petition challenging the plan. The proposed facility has also triggered protests in Laikipia County amid concerns over Kenya's role in regional Ebola response efforts.

Duale also told lawmakers that the government is seeking KES 2.6bn to strengthen preparedness for the first 100 Ebola cases. The funds would be used to improve border screening, surveillance, laboratory capacity, risk communication, logistics and emergency staffing. According to a ministry assessment, Kenya scored strongly in contact tracing, rapid response deployment and laboratory preparedness, but identified significant gaps in case management, infection prevention and control, logistics support and readiness at points of entry.

• Current power tariffs to remain in place
• Government cites inflation and cost-of-living concerns
• Decision may complicate sector funding plans

The govt has withdrawn a proposed review of retail electricity tariffs that could have increased power bills for households and businesses from July, leaving the current tariff structure in place, according to local news reports, citing energy minister Opiyo Wandayi. The decision was reportedly taken to protect households, businesses and industries from higher electricity costs while supporting economic growth, jobs and livelihoods.

The proposed tariffs were intended to cover the three-year period to June 2029 and were expected to help finance investments in electricity transmission and distribution infrastructure. Their withdrawal is likely to complicate efforts by Kenya Power and other sector entities to secure additional funding for planned projects, raising questions about alternative financing sources.

The move comes amid elevated inflationary pressures and recent increases in fuel prices. Annual inflation accelerated to 6.7% y/y in May, its highest level in 28 months. Business groups had warned that higher electricity tariffs would further increase operating costs and ultimately be passed on to consumers through higher prices for goods and services.

The tariff review process had already faced delays after the Energy and Petroleum Regulatory Authority (EPRA) postponed planned public participation meetings. Under the Energy Act, electricity tariff changes require technical evaluation, stakeholder consultations and public participation before approval. Current tariffs, introduced in April 2023, will remain in force unless a new review is initiated under the existing regulatory framework.

• New orders fall at fastest pace since mid-2025
• Employment contracts for first time in 16 months
• Inflation accelerates to strongest level since late 2023

Private sector business conditions deteriorated sharply in May, with the Stanbic Bank Kenya PMI falling further into the contractionary territory to 46.6 from 49.4 in April, its lowest level since July 2024. A reading below 50.0 signals a deterioration in business conditions.

The decline was driven by faster contractions in output and new orders as firms reported weak demand and greater customer caution amid rising inflationary pressures. New sales fell at the fastest pace since mid-2025, while construction and services firms recorded declines in both activity and orders. Businesses were also affected by about a week-long disruption caused by nationwide transport sector protests in May, which constrained movement across the country.

Weaker demand led firms to reduce staffing levels for the first time in 16 months, mainly through cuts to temporary contracts. Input purchasing also declined for the first time in eight months as companies cited weaker sales, cash-flow concerns and rising costs. Meanwhile, overall input price inflation accelerated to its strongest level since November 2023, driven largely by higher fuel and transport costs, while output price inflation reached a two-and-a-half-year high.

Despite the deterioration in current business conditions, firms remained optimistic about the year-ahead outlook. Confidence improved to its strongest level since February 2023, supported by plans for increased advertising, product diversification and expansion of online operations.

Kenyattas, Ndegwas to get over Sh22bn in NCBA deal (Business Daily)

How fuel protests triggered freeze in electricity tariffs hike (Business Daily)

Why you should plug into Finance Bill 2026 debates (Business Daily)

Nairobi elite police unit plan hits snag as Sakaja, Murkomen head to NYPD (Nation)

Ruto's new revenue hunt shifts to landowners (The Standard)

Panic hits school heads as wave of unrest rages (The Standard)

Murkomen: Kenya's major cities to get their own metro police units (Kenya Broadcasting Corporation)

Ruto Sticks To Chartered Planes As Presidential Jet Remains Grounded In Netherlands (Capital News)

President Ruto Lands At Waterkloof Air Force Base For Historic South Africa State Visit (Capital News)

Opposition defends Uhuru, accuses Ruto of failing to address cost of living (Citizen)

KNHCR identifies over 1,800 anti-government protest victims, submits names for compensation (Citizen)

Explained: Why Ruto is Using Chartered Flights for International Travel (Kenyans.co.ke)

• Project could generate up to USD 150bn in government revenues and nearly USD 4bn in annual tax receipts
• Balance-of-payments gains estimated at USD 9bn per year, while the Sovereign Wealth Fund could reach USD 81bn by 2056
• ExxonMobil continues preparations for a final investment decision, which is expected during 2026

According to local media reports, a new study by Standard Bank Mozambique estimates that the Rovuma LNG project could add around USD 11bn annually to Mozambique's GDP, highlighting the project's potential to become the country's most important long-term growth driver. The ExxonMobil-led development is expected to require approximately USD 30bn in upfront investment and could begin production by 2030, with the bank describing it as potentially the largest commercial project in Africa's history. According to the study, Rovuma LNG could generate as much as USD 150bn in revenues for the state over its operating life, while lifting average annual real GDP growth to 4.1% from a baseline of 3.3%. Annual tax revenues are projected at nearly USD 4bn, while Gross National Income could increase by around USD 6bn per year. The project is also expected to strengthen the external position, contributing an estimated USD 9bn annually to the balance of payments through higher exports and foreign-exchange inflows. The study forecasts the creation of around 151,000 jobs across the economy and a 21% increase in average household incomes. Standard Bank also estimates that Mozambique's Sovereign Wealth Fund could accumulate up to USD 81bn by 2056. The findings reinforce expectations that Rovuma LNG will be the principal driver of economic growth, exports and fiscal revenues over coming decades, although realizing these benefits will depend on successful project execution, continued security improvements in Cabo Delgado and prudent management of future LNG revenues.

We note that Standard Bank's Rovuma LNG study points to a very large upside, but the IMF's reading in its article IV consultation report is more measured and sequenced: it expects LNG projects led by TotalEnergies and ENI to start production in 2030, followed by Exxon's project in 2031, and says real GDP growth could reach about 12% in 2030 as the first two projects come on stream. Even so, the Fund cautions that the macro payoff will not be immediate, with LNG-related imports pushing the current account deficit to 33% of GDP in 2026 and reserves projected to fall to 2.3 months of total imports by 2030. It also shows the financing burden rising through ENH, whose debt is projected to increase from USD 4.6bn in 2024 to USD 20bn by 2045, underscoring that the sector's benefits will arrive alongside substantial balance-of-payments and debt pressures. The IMF, while not providing project-specific revenue estimates, expects LNG projects to drive a significant acceleration in economic growth from 2030 onward.

• Middle East conflict, higher oil and fertiliser prices increasing risks
• Sub-Saharan Africa growth forecast cut to 4.3% in 2026 from earlier projections
• Mozambique's CA expected to deteriorate on megaproject imports
• Bilateral aid to region may have fallen 16-28% in 2025, adding to pressures

The International Monetary Fund (IMF) warned that escalating global shocks including the Middle East conflict, rising energy and fertiliser prices, and declining international aid are increasing risks to Mozambique's economic outlook, creating new challenges for growth, inflation and external stability, according to local media reports. Speaking during the presentation of the IMF's latest Regional Economic Outlook for Sub-Saharan Africa in Maputo, IMF Resident Representative Olamide Harrison said the region is facing another major external shock while still recovering from a series of recent crises. According to Harrison, the conflict in the Middle East has increased uncertainty in global markets and contributed to higher prices for key commodities, particularly oil and fertilisers, which could have significant implications for import-dependent economies such as Mozambique. "We are seeing fertiliser prices surge and also oil prices, which we are all feeling," Harrison said. The IMF noted that rising commodity prices could increase production costs, place upward pressure on inflation and weigh on household purchasing power across the region. Worsening global financial conditions could also increase borrowing costs, reduce private investment and create exchange rate pressures for several African economies. The IMF revised its 2026 growth forecast for Sub-Saharan Africa downward to 4.3%, a 0.3pps reduction from earlier projections. While oil-exporting economies are expected to benefit from stronger energy prices, low-income and fragile states could face slower growth as external shocks intensify.

Mozambique's external accounts are expected to weaken in 2026, diverging from the improving trend projected for much of the region. The IMF forecasts that the median current account deficit across Sub-Saharan Africa will narrow to 3.5% of GDP in 2026, supported by stronger performances among oil exporters and resource-rich economies. However, Mozambique is expected to experience a deterioration due to rising imports linked to major investment projects. "A negative variation is expected in the case of Mozambique, due to a different economic structure, with an increase in imports driven by megaprojects," Harrison said. The IMF also highlighted declining official development assistance as an emerging challenge. Bilateral aid flows to Sub-Saharan Africa may have declined by between 16% and 28% in 2025, while humanitarian assistance has fallen even more sharply, increasing pressure on governments already facing tighter financing conditions and elevated debt burdens. The IMF urged policymakers to maintain prudent macroeconomic policies, protect vulnerable households from economic shocks and strengthen domestic resource mobilisation. With aid flows becoming less certain and global risks increasing, countries will need to rely more heavily on domestic resilience and policy discipline to sustain economic stability and growth. The Fund will send a mission to Mozambique from 8 to 12 Jun to assess recent economic developments and discuss the "best way" to support the country going forward.

• Urges pragmatic approach to debt burden
• Warns against repeating austerity measures of the 1980s
• Supports negotiated debt reprofiling with creditors

Former prime minister Aminata Toure has called for Senegal to pursue a reprofiling of its public debt rather than a restructuring, arguing that the country should address its debt challenges pragmatically while avoiding policies that would harm living standards. Speaking in an interview with RFI, Toure said the central issue is that Senegal faces difficulties meeting its debt obligations, regardless of whether the current debt burden resulted from underestimation or concealment of liabilities in previous years. She argued that the debate should move beyond ideology and focus on practical solutions.

Toure said she opposed the use of the term "restructuring", which she associated with the structural adjustment programmes of the 1980s that led to cuts in social spending, job losses and a prolonged rise in poverty. Instead, she advocated a negotiated reprofiling of debt with creditors and international financial partners. According to Toure, any debt-management strategy should preserve social spending and protect living standards. She warned against measures that would place the burden of adjustment on the population, arguing that fiscal sustainability must be achieved without undermining the country's economic and social foundations.

• Visit aims to deepen trade, investment and AfCFTA cooperation
• Kenya seen as strategic East African gateway for South African firms
• Migration concerns likely to feature amid anti-foreigner protests

\Kenyan president William Ruto arrived in Pretoria on Thursday on a three-day high-level state visit in which he will participate in a South Africa-Kenya business forum in Johannesburg and will hold bilateral official talks with president Cyril Ramaphosa. The visit is one of the most significant diplomatic engagements between the two countries in recent years. Discussions will focus on trade and economic cooperation, as well as regional, continental, and international issues. The local media report that trade minister Parks Tau will not be able to attend the forum due to contracting COVID-19. He said in a statement that South Africa and Kenya are both well positioned to harness the African Continental Free Trade Area (AfCFTA) for improved trade growth, complementary regional gateways and job creating investments that has potential to drive continental integration.

Trade between South Africa and Kenya increased from ZAR 9.3bn in 2016 to ZAR 10.5bn in 2025, registering an average growth rate of 3.5% over the period. At least 60 South African companies are operating in Kenya across various sectors. Some of the largest ones include Vodacom, MTN, Old Mutual and Cliffe Dekker Hoffmeyer. Kenya is the largest recipient of South Africa's foreign direct investment with a great potential to increase, according to a senior South African government official who spoke to The Africa Report. He added that South Africa's development finance institutions, such as the Development Bank of Southern Africa, see great potential in Kenya, and both countries want to take greater advantage of the AfCFTA for trade and the development of value chains.

The visit is strategically important because both countries are positioning themselves as complementary gateways into the continent's largest regional markets, with South Africa offering capital, corporate scale and industrial capacity, while Kenya provides access to East Africa's fast-growing consumer and investment base. Standard Bank, which is the continent's largest lender, specifically highlights Kenya as a compelling expansion opportunity for South African banks, citing the country's stable exchange rate, functioning foreign exchange market, record-high foreign reserves, improving capital markets and resilient growth outlook. The bank notes that Kenya's GDP expanded by 4.6% in 2025 and is expected to recover gradually above 5% over the medium term, strengthening the case for deeper financial, trade and investment links.

The two countries are also expected to discuss migration issues in light of the recent violent protests which are taking places across South Africa. According to tracking by the Daily Maverick, nine anti-foreigner protests have erupted in the Western Cape, Gauteng, Free State, and Kwa-Zulu Natal since May 26 in which fatal incidents have been reported. South African anti-immigrant groups have issued a deadline to all undocumented migrants to leave the country by Jun 30 instilling fear among foreigners and prompting a wave of repatriation of foreign nationals. According to various reports thousands of nationals of Nigeria, Mozambique, Ghana, Malawi and other states have left South Africa in response to xenophobic attacks. President Ramaphosa vowed to enforce domestic immigration laws, including the deployment of 10,000 inspectors to check the legal status of employees, but at the same time warned that protests should not dissent into xenophobic violence.

• Proposal is subject to public consultations with hearings scheduled on Jul 7
• New tariff replaces expiring blanket 10% tariffs on imports in the US

South Africa faces a proposed new 12.5% US import tariff after the United States Trade Representative found that the country had failed to impose and effectively enforce a prohibition on imports made with forced labour. The measure forms part of a wider Section 301 action targeting 60 economies which according to the United States government have not done enough to prevent forced-labour goods from entering their markets. The USTR said South Africa falls into the group of economies that have not imposed an explicit forced-labour import ban, placing it in the higher 12.5% tariff category together with China, India, Japan, Australia, New Zealand and others. A lower 10% rate is proposed for economies that already have a forced-labour import prohibition framework, including Canada, the EU, Mexico, and the UK.

The proposed tariff is expected to replace the temporary 10% tariff currently applied to a range of South African goods which is set to expire on Jul 24 due as they are a temporary measure under US legislation unless extended by Congress. The new tariff would come on top of normal US customs duties where applicable. Goods already subject to Section 232 tariffs, including vehicles, steel and aluminium, are excluded from the new Section 301 tariff. Exemptions for precious metals, minerals, pharmaceuticals, some fruit and vegetables and organic chemicals as listed in Annex A of the Federal Register notice remain in effect.

The proposal is subject to public consultation and hearings are scheduled for Jul 7. South Africa's trade and industry minister Parks Tau has requested its US counterpart to present more details about which products are imported using forced labour and their countries of origin in order to address the issue. This is unlikely to have a meaningful impact with respect to the imposed tariffs.

SA among 60 countries facing new 12.5% tariff from US (Business Day)

Ramaphosa dismisses 'political theatre', prioritises economy (Business Day)

Sarupen says Treasury can't act as municipalities' financial manager (Business Day)

Standard Bank backs investment in powerhouse Kenya during Ruto visit (Business Day)

'Bad actors' want to undermine SA, but Ninety One CEO upbeat about local revival (News24)

Ship surge along SA coast no business bonanza, says Creecy (News24)

FlySafair slashes surcharges as jet fuel price, supplies ease (News24)

Chris Yelland | Why Eskom's coal fleet is now a strategic risk for SA exporters (News24)

'Mgalelo stokfel': MKP killed internal probe that found chief whip 'extorted' Parly staff (News24)

Phala Phala: Ramaphosa says he'll respect the rule of law (News24)

ANC chaos in Emfuleni: 'No service delivery, no budget, and no mayor' (News24)

Transnet completes R4bn investment at Saldanha iron ore terminal (Moneyweb)

More members of executive implicated in Department of Social Development fallout (Daily Maverick)

Here are the countries repatriating citizens from SA during anti-foreigner protests (Daily Maverick)

'Violence is not activism': NatJoints talks tough on anti-foreigner mobs after xenophobic unrest (Daily Maverick)

• New orders, output and employment grow further
• Higher fuel and material costs drive further inflation but business sentiment remains positive
• PMI suggests robust business activity growth in H1

The Stanbic Bank Uganda PMI decreased slightly to 54.1 index points in May from 55.0 in April but remained in expansionary territory, signalling further robust growth in private sector activity. New orders and output continued rising reflecting sustained customer demand and increased client referrals, leading companies to further increase employment and input purchases. Input costs continued rising too, reflecting higher purchase and staff costs, in particular fuel and material prices. Companies responded by hiking output prices. Business sentiment remained positive supported by expectations of stronger customer demand.

Data Download

The PMI data signals robust growth in private sector activity in Q2. According to the latest available data, GDP growth picked up to 8.5% y/y in Q4 2025 from 4.8% y/y in Q3, and averaged 6.7% in 2025, up from 6.0% in 2024. Growth is forecast to pick up to 7.5% in 2026 and 8.2% in 2027 as the country starts producing oil.

• Utility calls for investment in solar and net metering systems
• Preparation needed for potential drought or floods
• ZESCO assures no power supply challenges after elections
  

ZESCO today urged Zambians to prepare for potential El Nino impacts by investing in solar energy and adopting net metering technologies, as the country seeks to strengthen energy security following recent climate‑related power disruptions. Board Chairperson Vickson Nc'ube said households, businesses and institutions should diversify energy sources to reduce vulnerability to weather‑related shocks that could affect electricity generation. "There is need for the country to be adequately prepared for various outcomes associated with El Niño, whether it results in floods or drought," he said. The call comes after recent droughts exposed risks from heavy hydropower dependence, which accounts for most of Zambia's installed capacity. Nc'ube noted that broader adoption of solar power would help maintain reliable supplies under varying climatic conditions. ZESCO also highlighted net metering, which allows consumers with solar installations to feed excess power into the grid for credits. Despite weather risks, Nc'ube assured the public that ZESCO does not anticipate power supply challenges after the upcoming elections. Expanding distributed renewable energy is seen as critical for building a more resilient power system.

We recall that the 2023/2024 El Nino drought was Zambia's worst in two decades, affecting 9.9mn people across 84 districts and destroying nearly 1mn hectares of maize (approximately 40% of national output). Hydropower generation collapsed as Kariba's usable storage fell to just 11.6%, triggering up to 21 hours of daily load shedding and widening the peak deficit to over 750MW. Inflation soared to a 39‑month high of 16.5% in March 2025, while emergency relief including a USD 3.5mn Chinese donation and ZMW 200 monthly top‑ups for 2.2mn households provided only temporary relief. Although the 2025/26 record maize harvest projected at 4.94mn tonnes and improved reservoir levels have eased pressures, ZESCO's recent call for solar adoption signals that the utility is preparing for a possible return of load shedding if below‑average rainfall and El Nino conditions re‑emerge in the coming season. As of May 25 this year, Lake Kariba's usable live storage stood at 44.14%, up from 18.74% a year earlier, reflecting vastly improved water levels at the country's biggest hydropower dam. Zambia still relies on regional imports following this severe drought, while hydrological recovery at Kariba dam and new solar and coal capacity offer near-term relief, though structural diversification remains critical. Currently, govt appears to have restored almost 24/7 power supply across the country, but as the dry season approaches starting in August, this situation could change drastically.

Expect higher fuel prices after waiver period - ex-oil Marketing Companies Association president (News Diggers)

Economist attributes kwacha appreciation to copper earnings (News Diggers)

People have high hopes for our alliance, it must work - Mundubile TONSE-Pamodzi Alliance president (News Diggers)

There's no election hype as opposition lack clear policies - State House (News Diggers)

HH signs free education, pension laws today (News Diggers)

Peter Chanda's NCP dumps opposition, endorses HH (News Diggers)

Zambia launches SADC project to build responsible mineral value chains for energy transition (Zambia Monitor)

Chamber of commerce backs reforms as Zambia aims for 24-hour economy (Zambia Monitor)

• Strong copper exports and firmer shipments lift the goods surplus 350.6% y/y to USD 1,276.1mn
• Services deficit narrows 21.2% y/y, helped by a 29.2% rise in travel credits
• Primary income deficit widens 72.5% y/y, keeping the external account under pressure
• Financial account remains in deficit, while net errors and omissions also turn sharply negative
• Preliminary 2025 current-account data show a wider deficit of USD 1,577.4mn, or 5.1% of GDP, even as reserves rise

The current-account (CA) balance swung to a surplus of USD 396.4mn in Q1 2026 from a deficit of USD 278.6mn in Q1 2025, according to the latest balance-of-payments data from the Bank of Zambia. The improvement was driven mainly by a much stronger goods balance, which rose 350.6% y/y to USD 1,276.1mn as exports increased 55.4% y/y to USD 4,477.5mn while imports climbed 23.3% y/y to USD 3,201.4mn. Copper exports surged 62.8% y/y to USD 3,226.1mn, while the services deficit narrowed 21.2% y/y to USD 105.3mn. Primary income remained in deficit at USD 920.8mn, widening 72.5% y/y from USD 533.9mn in Q1 2025, while the secondary income surplus rose to USD 146.5mn from USD 105.7mn. The central bank made some revisions to the BoP data from Q3, 2025.

Data Download

The goods surplus widened to USD 1,276.1mn in Q1 from USD 283.2mn a year earlier, as export receipts outpaced import growth. Services credits rose 20.1% y/y to USD 456.7mn, helped by a 29.2% increase in travel receipts to USD 384.9mn, while services debits increased 9.3% y/y to USD 562.0mn. The balance on goods and services improved to USD 1,170.8mn from USD 149.6mn, while the balance on goods, services and primary income swung to a surplus of USD 250.0mn from a deficit of USD 384.3mn. Primary income credits edged up to USD 31.3mn from USD 24.7mn, but the primary income deficit still widened to USD 920.8mn from USD 533.9mn because debit outflows climbed to USD 952.1mn from USD 558.6mn. The financial account remained in deficit at USD 1,066.5mn, versus a deficit of USD 286.0mn a year earlier, while net errors and omissions deteriorated sharply to a deficit of USD 1,014.8mn from a deficit of USD 80.4mn. As a result, the overall balance moved to a deficit of USD 469.2mn from a surplus of USD 51.8mn in Q1 2025, even though reserve assets rose to USD 714.4mn from USD 49.6mn.

The preliminary annual current-account data for 2025 shows a deficit of USD 1,577.4mn, or 5.1% of GDP, wider than the USD 1,116.1mn deficit, or 4.4% of GDP, recorded in 2024. The deterioration was driven by a wider services deficit of USD 812.7mn and a larger primary income deficit of USD 3,024.4mn, which more than offset a 30.3% y/y increase in the goods surplus to USD 1,696.0mn. Annual exports rose 19.2% y/y to USD 13,547.0mn, supported by copper exports of USD 8,921.9mn, non-traditional exports of USD 4,259.9mn and gold exports of USD 345.6mn. Copper export volumes rose 6.9% y/y to 856,405.8 tonnes, while realised copper prices increased 8.2% y/y to USD 10,083.9 per tonne. Gross international reserves increased 28.3% y/y to USD 5,532.6mn, lifting import cover to 4.8 months from 4.6 months, while unencumbered reserves rose to USD 4,143.1mn and import cover based on those reserves improved to 3.6 months from 3.4 months. The IMF in its latest World Economic Outlook report expects the CA to swing from a deficit of 3.5% of GDP in 2025 to a surplus of 0.9% in 2026 and build up to 1.9% in 2027 likely supported by firmer copper prices and easing external debt service pressures.

• Former ZSIS director general faces seven State Security Act counts
• Three counts relate to alleged seditious practices
• Opposition figures see this arrest as political intimidation by the Hichilema led administration

Zambian police formally charged former Zambia Security Intelligence Service (ZSIS) director general and aspiring presidential candidate Xavier Chungu with 11 criminal offences ahead of the August 13 general elections. Police Public Relations Officer Godfrey Chilabi said Chungu faces seven counts of communicating information contrary to the State Security Act, three counts of seditious practices under the Penal Code, and one count of disclosing information to an unauthorised person under the ZSIS Act. The alleged offences occurred on May 24 while Chungu remains in custody. Separately, police are investigating ten cases of suspected forged academic certificates submitted to the Electoral Commission of Zambia during the nomination process, with one arrest made in Chipata. Authorities also reported investigations into an alleged sexual abuse case and confirmed that a post‑mortem found natural causes in a suspect's death in custody at Chinsali.

We observe that recent local media reports appear to confirm a recurring pattern of intimidation against opposition candidates, supporting the claim of a strained democratic environment. Among these reports include detailed incidents of blocked nominations and physical violence against independent candidates and even accuses the ruling UPND of bribing and intimidating opponents to withdraw directly raising the stakes for the August elections. This context is critical for analyzing the case of former intelligence chief Xavier Chungu. His arrest on 11 charges under the State Security Act has been labeled by opposition leader Milner Katolo as part of a "pattern of intimidation," and over 100 independent candidates were facing a legal challenge seeking their disqualification, although this now appears resolved after the electoral body announced that they could contest. Such actions undermine the credibility of the electoral process. The convergence of legal challenges against Chungu, the disqualification of other candidates, and systemic allegations of state-backed intimidation points to a deliberate strategy by the ruling party to consolidate power. If these tactics succeed in sidelining viable opposition figures, they threaten to reduce the August polls to a mere formality, jeopardizing the democratic principles of free and fair competition and potentially undermining the legitimacy of the eventual victor.

• Copper approaches USD 14,000 per tonne amid supply concerns and geopolitical tensions
• Zambian Kwacha strengthens below ZMW 18 per USD on strong forex inflows
• Stronger copper prices, stable kwacha providing support to the external sector, inflation outlook

Copper prices moved closer to record highs while the Zambian Kwacha extended its recent appreciation against the US dollar, highlighting improving market conditions for Africa's second‑largest copper producer. According to the Zambia National Commercial Bank (Zanaco), copper approached USD 14,000 per tonne as investors responded to tighter global supply expectations and resilient industrial demand. Aluminium also surged to its highest level in more than four years. Oil prices strengthened on Middle East tensions, with Brent crude at USD 96.81 per barrel. For Zambia, higher copper prices support export earnings, government revenue and the ongoing economic recovery.

On the domestic market, the Kwacha strengthened to ZMW 17.95/18.00 per dollar from an opening of ZMW 18.15/18.20 this week, driven by excess forex supply. The Kwacha remained one of the strongest-performing currencies globally in 2026, averaging ZMW 18.86/USD in May compared to 19.09 in April, supported by stronger copper prices and improving forex inflows. The currency has appreciated by more than 19% against the dollar this year, helping contain imported inflation pressures, with headline inflation falling to 6.6% y/y, the lowest level since Feb 2018 as food prices continue to soften. Zanaco expects near‑term stability stating that the Bank of Zambia purchased ZMW 1.18bn through open market operations to manage liquidity. Commercial banks held current account balances of ZMW 508mn, with the overnight interbank rate at 13.5%.

Stronger copper prices and a stable currency provide a supportive backdrop for Zambia's external sector and imported inflation outlook. Gross international reserves rose to USD 6.2bn at end‑March 2026 (5.2 months of import cover) from USD 5.5bn at end‑2025, after hitting a historic high of USD 6.5bn in February before easing on outflows for fuel (USD 114.7mn), market support (USD 106.5mn) and debt service (USD 40.1mn).

• Bondholder group has secured a blocking stake of more than 25% in Zambia's USD 1.36bn 2053 Eurobond
• Bondholders have little incentive to tender as bond price rises above government's offer
• Govt seeks to retire debt before coupon potentially jumps from 0.5% to 7.5%, could be triggered in Jun and Dec

Government is set to enter negotiations with a bondholder group after investors blocked the government's attempt to fully retire its USD 1.36bn 2053 Eurobond through a buyback offer, according to Bloomberg. The creditor group, which has accumulated more than 25% of the outstanding securities, can prevent Zambia from activating a clean‑up call provision. Sources say non‑disclosure agreements could soon be signed for confidential talks. The government had offered USD 780 per USD 1,000 principal for bonds tendered by Jun 5, partly financed by a USD 600mn AfDB loan. The bonds have rallied to around 81 cents on the dollar, above the 78‑cent offer, reducing investor incentives to tender. However, a group of holders pushed back against the government's recently launched buyback offer, arguing that the terms unfairly disadvantage investors and were presented without meaningful negotiations. The noteholders consider the tender offer "materially adverse" to their interests and are encouraging other investors to coordinate a response.

At the dispute's core is a step‑up coupon mechanism from the 2024 restructuring. The coupon could jump from 0.5% to 7.5% if Zambia meets an IMF debt‑sustainability metric for two consecutive periods with the first expected in June 2026, the second in December. Retiring the bond before the step‑up would save Zambia substantial interest costs by replacing expensive commercial debt with cheaper multilateral financing. The outcome will signal Zambia's post‑restructuring debt management approach and balance between sovereign sustainability and creditor returns.

• Waiver covers 271,742 tonnes of copper concentrates across multiple mining companies amid smelter maintenance
• Waiver was first introduced in August 2025 after technical challenges reduced domestic smelting capacity

Government extended the suspension of its 10% export duty on copper concentrates until Sep 30 providing temporary relief to mining companies facing processing constraints caused by ongoing smelter maintenance and operational upgrades. The extension covers 271,742 tonnes of copper concentrates and is intended to help producers manage growing stockpiles while several major smelters undergo extended repair programmes. Konkola Copper Mines (KCM) recently commenced a planned 60-day shutdown of its Nchanga Smelter as part of a major maintenance and rehabilitation programme while Mopani plans a 40‑45 day outage while Chambishi will undertake a two‑month plan maintenance closure in the same window.

The measure was first introduced in August 2025 after technical challenges reduced domestic smelting capacity. Zambia exported 890,346 tonnes of copper in 2025 and has set an ambitious target of increasing annual output to 3mn tonnes by 2031. Under the latest allocation, Mopani Copper Mines received the largest duty-free export quota of 100,000 tonnes. Barrick's Lumwana received 56,986 tonnes, while First Quantum Minerals and Nkana Mining each received approximately 43,000 tonnes. The extension comes as Zambia's mining industry undertakes substantial investments in smelting infrastructure. By temporarily allowing concentrate exports without the additional tax burden, the government aims to prevent operational bottlenecks and support export earnings while domestic processing capacity is restored.