EmergingMarketWatch coverage of Egypt will be limited on 03 Jul 2025 due to a public holiday.

• BII's financing will contribute to development of 1.1 GW wind farm and 1.1 GW BEES project

British International Investment (BII) has signed agreements worth USD 300mn to support two flagship renewable energy projects in Egypt. BII's financing will contribute to the development of a 1.1 GW wind farm in the Gulf of Suez and Egypt's first fully integrated solar photovoltaic and battery storage system (BESS), also with a 1.1 GW capacity. Under Egypt's energy transition plan, the country aims to install 10 GW of renewable energy capacity and phase out 5 GW of fossil-fuel-based power by 2028, at an investment estimated at USD 10bn. Egypt has already attracted USD 4 bn in concessional financing for 4.2 GW of new renewable energy capacity since 2023.

Wind Farm in Gulf of Suez

The Gulf of Suez wind project is set to become Africa's largest onshore wind farm, with a total investment of USD 1.2bn. It also plays a key role in Egypt's Nexus of Water, Food, and Energy program. Beyond environmental benefits, its development is projected to create more than 10,000 direct and indirect jobs, fostering economic growth in the region. BII's contribution to this project includes USD 190mn, forming part of a broader USD 704mn debt financing package supported by a coalition of development finance institutions, such as the EBRD and AfDB.

Battery storage system

BII's financing also supports Egypt's first fully integrated solar photovoltaic and battery storage system. The project, which is expected to support Egypt's commitment to transitioning toward sustainable energy solutions, is again in collaboration with Scatec, EBRD, and AfDB. The project will require a total of USD 480mn - covering around 80% of its capital costs - and will deliver 1.1 GW of solar energy coupled with 200 MWh of battery storage capacity. To support the financial viability of this pioneering BESS project, BII is providing a USD 100mn concessional loan and a USD 15mn grant.

Egypt condemns Israeli Minister's statements over occupied West Bank annexation (Ahram)

Egyptian Automotive & Trading Company launches the New Third-Generation Audi A5 in Egypt (Ahram)

BII commits over USD 300mn to Egypt's renewable energy projects (Ahram)

IMF Program for Egypt: Fifth, Sixth Reviews May Be Merged (Sada Elbalad)

Egypt Hikes Cigarette Prices as New VAT Law Takes Effect (Sada Elbalad)

Egypt, Ukraine presidents discuss Iran-Israel crisis, Gaza ceasefire efforts (Egypt Today)

Suez Canal navigation uninterrupted despite ADMARINE12 rig incident (Egypt Today)

Egypt & Oman deepen economic ties with new 7 agreements (Egypt Today)

• Sales growth slows
• Regional tensions adversely affect tourism

The Dubai Purchasing Managers' Index (PMI) fell to 51.8 in June from 52.9 in May, according to S&P Global. The Dubai PMI thus dropped to its lowest level in nearly four years in June, driven by a marked slowdown in sales growth.

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Non-oil private sector companies reported only a small increase in new order volumes in June, the weakest in 45 consecutive months of growth. Many companies noted that competitive pressures and weaker tourism due to heightened regional tensions had negatively affected overall levels of new work.

Nevertheless, business activity rose sharply in June, with the pace of expansion matching that seen in May. Workforce numbers increased for the third consecutive month, albeit only slightly.

• New order growth slows to 45-month low
• Employment growth increases slightly

The seasonally adjusted S&P Global UAE Purchasing Managers' Index (PMI) rose to 53.5 in June from 53.3 in May. The slight improvement masked diverging trends among the index's sub-components, as a softening of new business growth was offset by a quicker expansion in output and a stabilisation of inventories.

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While non-oil businesses posted a rise in their new order intakes, the rate of growth eased and was the weakest since September 2021. Concerns about increasing regional tensions due to the conflict between Israel and Iran dampened client demand.

However, despite sales growth softening, UAE non-oil companies increased their output to a greater extent than in May, In fact, the gap in expansion rates between activity and sales widened sharply, which firms partly attributed to efforts to address long-standing capacity pressures.

Separately, employment increased modestly in June. Although the pace of growth slipped to a three-month low, it remained stronger than the trend observed in the first quarter.

Now let's look ahead. The level of confidence about the next 12 months increased to the strongest since November 2024. Non-oil companies said that projected sales growth and an easing of geopolitical tensions were the main drivers of positivity, according to S&P Global.

• That is an increase of 39% from March

Hotels in Abu Dhabi generated revenues of AED 847mn (USD 231mn) in April, according to the UAE's official news agency. That is an increase of 39% from AED 611mn (USD 166mn) in March.

A total of 172 hotels were in operation during the month, offering 34,383 hotel rooms. The total number of guest nights exceeded 1.52mn, with an average occupancy rate of 87%. The average revenue per available room reached AED 614 (USD 167).

Guests from non-Arab Asian countries topped the list with 149,000 hotel guests, followed by European visitors with 148,000, and UAE nationals with 97,000.

By category, five-star hotels received the highest number of guests with 265,000, led by 95,000 European visitors. Four-star hotels hosted 143,000 guests, while hotels rated three stars or below received 63,000 guests. Additionally, 61,000 guests stayed in hotel apartments.

• Foreign inflows rose by 148% m/m in May, foreign outflows increased by 45%
• Foreign investor participation increased to 17%, from 13% in May

Net offshore portfolio flows into Nigerian equity recorded a surplus (net inflow) in May of NGN 13.3bn (USD 8.7mn), according to NGX data. Foreign inflows rose by 148% m/m, to NGN 66.1bn from NGN 26.6bn in April. Foreign outflows increased to NGN 52.8bn in May from NGN 36.4bn in April, a 45% rise. Overall market turnover increased by 45% m/m to NGN 700.5bn in May. The rebound was supported by moderating fixed income yields and improved investor sentiment, which encouraged foreign interest in the equities market. The share of foreign participation in the market increased to 17% from 13% a month earlier. Total foreign transactions rose significantly by 89% m/m.

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Market analysts attribute the recent uptick in foreign activity to macroeconomic reforms, improved FX liquidity and greater investor confidence. However, domestic investors continue to maintain the dominant share. Domestic investors made up 83% of participation, with retail participants significantly outperforming institutional investors. Total domestic transactions increased by 39% m/m from NGN 418.97bn in April to NGN 581.59bn in May. Year-to-date total equity transactions totalled NGN 3.41tn, up from NGN 2.25tn in the same period in 2024.

• IMF said government should NGN 700nn monthly in fuel subsidy savings withheld by NNPC
• Failure to recover subsidy savings may force government spending cuts
• NNPC fulfilled all cash-call obligations to joint ventures between May and June 2025

The IMF has urged the Nigerian federal government to fully recover fuel subsidy savings currently withheld by the Nigerian National Petroleum Company Limited (NNPC) to sustain economic reform momentum and protect fiscal stability. In its 2025 Article IV consultation report, the IMF estimated these savings at about NGN 700bn per month, equivalent to roughly two percent of Nigeria's GDP annually. The Fund stated that redirecting these funds to the government's coffers is essential for maintaining a neutral fiscal stance and financing critical development projects.

Although Nigeria officially ended the fuel subsidy in 2023, the expected savings have not fully appeared in the federal budget due to a lack of transparency in the NNPC's oil revenue remittances. The IMF warned that if the government does not realize these subsidy savings starting in the second half of 2025, it will have to make tough budget adjustments elsewhere, particularly by cutting expenditure by about 0.6% of GDP.

Meanwhile, the NNPC reported that it has successfully met its cash-call obligations to joint venture operations and achieved 100% crude oil pipeline availability between May and June 2025. Group chief executive officer of the NNPC, Bayo Ojulari, announced this achievement during his keynote address at the 24th NOG Energy Week in Abuja. Ojulari said key pipelines such as the Trans-Niger, Trans Escravos and Trans Forcados all maintained full operational capacity during this period. Looking ahead, Ojulari outlined ambitious goals for the company, including increasing oil and gas sector investments from USD 17bn in 2024 to USD30bn by 2027 and USD 60bn by 2030. The NNPC aims to raise crude oil production to 2mn barrels per day by 2027 and 3mn barrels per day by 2030.

Nigeria must review 2025 budget to avert crisis, IMF warns (Punch)

MAN, marketers rally for refineries privatisation as $3bn repairs falter (Punch)

Oil producers get boost as NNPC clears legacy debts (Punch)

Nigeria to end gas flaring by 2030 under new strategy - NUPRC (Punch)

IMF: FG Needs to Rework 2025 Budget to Accommodate Lower Oil Prices (ThisDay)

Shettima: Private Investors Ready To Commit $60m To Upgrade Onne To Nation's First Green Port (ThisDay)

US-Africa Summit Prepares Nigeria For $2.1trn Consumer Spending Boom (ThisDay)

FG signs technical manpower deal with Saint Lucia, deploys experts to Caribbean countries (Nairametrics)

World Bank disburses N3.8 billion to boost climate adaptation in Yobe communities (Nairametrics)

IMF backs CBN's tight monetary policy to curb inflation (Nairametrics)

• Article IV report recommends revisiting the budget to reflect a less favourable oil price outlook
• IMF warns the fiscal deficit could widen from 4.1% to around 4.7%
• 2025 GDP growth forecast is raised to 3.4%, up from 3% projection in April
• IMF flags rising poverty and food insecurity, and calls for increased investment in infrastructure

The IMF published Nigeria's 2025 Article IV report on Wednesday (July 2), after consultations with Nigerian authorities on April 2-15. In the report, the IMF urges the government to revisit its proposed 2025 budget of NGN 54.99tn, warning that the current budget assumptions could widen the fiscal deficit from 4.1% to approximately 4.7%. This would increase Nigeria's debt burden and expose it to external shocks. Despite these concerns, the IMF raised Nigeria's 2025 GDP growth forecast to 3.4%, higher than the 3% estimate issued in the April World Economic Outlook update. Medium-term growth is expected to average around 3.5%. The higher forecast is underpinned by rising oil production and easing inflation.

The IMF also attributed the improved outlook to key reforms over the past two years, including the removal of fuel subsidies, stopping of monetary financing of fiscal deficits, and implementation of measures to stabilise the foreign exchange market. The Fund said these actions have boosted investor confidence, allowing Nigeria to access the Eurobond market and attract renewed portfolio inflows. However, the IMF urged Nigeria to implement a robust foreign exchange intervention framework to help reduce excess volatility in the FX market, describing the exchange rate as a key shock absorber.

Recent tax reforms aimed at boosting revenue mobilisation and ensuring debt sustainability were welcomed in the report. Nigeria's fiscal performance improved in 2024, supported by naira depreciation, stronger revenue administration and increased grant inflows which helped offset rising interest and overhead costs. The CBN was commended for maintaining a tight monetary policy stance to curb inflation. Efforts to recapitalise the banking sector and promote broader financial inclusion were also acknowledged.

Despite some positive economic gains, the IMF noted a rise in poverty and food insecurity. The Fund also cautioned that growth remains too low on a per capita basis. Downside risks from global uncertainty that were noted in the Article IV report include potential declines in oil prices or rising financing costs which could negatively impact growth, fiscal and external positions, and financial stability. To sustain reform momentum and boost Nigeria's growth potential, the IMF recommended stronger investment in electricity, agriculture, education, health and climate resilience, alongside efforts to reduce bureaucracy.

• Services exports are up for tenth month running, supporting CA surplus
• Major impact comes from high-tech services

Services exports (excluding the sales of start-up companies) rose by 13.4% y/y (sa) in April increasing for the tenth consecutive month, according to the latest seasonally-adjusted data of the stats office (CBS). The growth was only partially supported by a lower base last year as the indicator posted expansion compared to previous years too and the level was a record high for that month of the year. We recall that services exports have been declining in March 2023 - June 2024 and this had an adverse impact on the current account since the services balance is its largest component.

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The important business services rose by 12.6% y/y in April. Its major component high-tech export services (programming, computers, IT, R&D, etc., 68.6% of total exports services excl. start-ups in February) rose by 11.4% y/y. The other components also had positive contribution even if not so important and in the case of travel and passenger fares, supported by base effects. Start-up exports (defined as the sale of intellectual property) recorded no exports in April while reporting USD 105mn a year ago. As a result, total services exports posted a smaller increase of 11.6% y/y in April, about the same as in the previous three months.

• Decline is due to war, ytd registrations are still on the rise
• Media estimate that some 10% of sales are not real sales
• Experts expect strong recovery in following two months

New car deliveries fell by 34.4% y/y in June because of the Iran war, which lasted for 12 days and almost completely froze economic activity, according to data of the car importers' association published by local media. Despite the strong decline, the market is still on the rise this year with deliveries up by 2.9% y/y in H1. We note that new car deliveries had posted strong increases almost in all months since September 2024. However, local media estimate that more than 10% of the car registrations reflect sales to the employees of car importers or registrations by the importers themselves. Moreover, media claim that many of the sales were to companies, affected by large discounts.

Hyundai maintained the top position on the delivery table in H1 grabbing 12.6% of the market. Toyota remained second but has been swiftly catching up and its market share was insignificantly lower at 12.5% of all deliveries in H1. Kia was third with 8.5%. Deliveries of new electric vehicles accounted for about 16.4% of all deliveries in the period, and this share has been stable since the year started but is down from some 25% a year ago. Market experts believe that the car deliveries number will benefit from a significant upward correction in the following two months (up to 30,000 deliveries per month as compared to just above 17,000 in June) to compensate for the freeze during the war.

Ousting [Israeli Arab MK] Ayman Odeh From Knesset Is a Declaration of War on Arabs in Israel (Haaretz)

Live Updates | Report: Hamas to Release 10 Living Hostages, 18 Bodies in Five Stages During Cease-fire (Haaretz)

Following Haaretz Exposé: Retired Senior IDF Officer Questioned as Qatargate Suspect (Haaretz)

Syria's Sharaa makes moves towards Abraham Accords to reduce Turkish influence While Erdogan is doing everything to delegitimize Israel, any agreement between Israel and Syria "also undermines Turkey's strategy," Yanarocak told Maariv. (Jerusalem Post)

'Moment for bold action,' former hostages, families tell US Treasury Secretary Bessent (Jerusalem Post)

The North was hit harder than the South: This is how the war affected employment (Calcalist)

The convalescence allowance was offset because of the war - how much did your salary suffer? (Calcalist)

Budget Division: Edelstein's plan will add thousands of shekels a month to tax evaders and will seriously harm the economy (Calcalist)

The scandalous bill promoted by Edelstein eliminates the chance of recruiting Haredim (TheMarker)

After four years in Israel: Tesla's sales are falling - and competitors are getting stronger (TheMarker)

Men's employment dropped because of the reserves - and the "unreal" figure on haredi employment (TheMarker)

Netanyahu's request to Trump: Pressure Qatar to expel Hamas officials (Globes)

The map of flights from Israel has changed: the destinations that will replace Western Europe (Globes)

• Economy expands despite regional pressures
• GDP growth was largely driven by manufacturing sector (+5.1% y/y)

Jordan's economy expanded by 2.7% y/y in Q1 of 2025, maintaining the same growth rate as in the previous quarter, according to preliminary data released by the kingdom's Department of Statistics (DoS).

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The steady growth reflects the economy's resilience in the face of ongoing regional instability, including tensions in Gaza, the West Bank, Lebanon, and Syria. Despite these external challenges, Jordan has managed to sustain momentum, although high unemployment, particularly among youth and women, continues to pose a major structural risk. The government has pledged to address joblessness through targeted reforms and initiatives aimed at improving labor market access and attracting greater foreign investment.

Sectoral data shows that the manufacturing sector was the largest contributor to GDP growth, expanding by 5.1% y/y. Agriculture posted the highest growth at 8.1%, while finance, insurance, real estate, and business services also made positive contributions to the overall economic performance.

Looking ahead, the World Bank and IMF project that Jordan's economy will grow by 2.6% in 2025. The central bank, however, maintains a slightly more optimistic outlook, with governor Adel Sharkas forecasting 2.7% growth this year and a medium-term acceleration to 3.5%.

• Employment again increases
• Companies remain optimistic about next 12 months

The headline S&P Global Kuwait Purchasing Managers' Index (PMI) fell to 53.1 in June from 53.9 in May. Nevertheless, operating conditions have now been above the 50.0 no-change mark for ten consecutive months.

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New orders continued to rise at a marked pace at the end of the second quarter, feeding through to a record increase in employment as firms attempted to keep on top of workloads.

The increase in workforce numbers in June was the sharpest since the survey began in September 2018, but still only modest overall. As a result of this expansion of employment, staff costs also increased at the fastest pace on record.

Companies in Kuwait again posted marked increases in both output and new orders in June. Total new business was supported by a series record increase in new export orders.

Looking forward, business confidence strengthened for the second month running and was the highest since May 2024.

The Kuwait PMI indices are compiled from survey responses from a panel of around 350 private sector companies. The headline S&P Global Kuwait PMI is a composite single-figure indicator of non-oil private sector performance. It is derived from indicators for new orders, output, employment, suppliers' delivery times and stocks of purchases.

• Similarly, reserves decrease 4% m/m

The total reserve assets held by the Central Bank of Kuwait decreased 3% y/y to KWD 14.1bn (USD 46.4bn) at the end of May. Similarly, official reserves decreased 4% m/m. We remind that total reserves assets reached a record high of USD 52.8bn in February 2023.

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

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• Potential for border talks signals possible shift in bilateral ties amid weakened Hezbollah influence

Syria is ready to begin land border demarcation talks with Lebanon, Lebanese foreign minister Youssef Rajji said. Rajji stressed that Lebanon has received confidential French documents outlining a historical French demarcation of the Lebanese-Syrian border, which could serve as a foundation for formal negotiations between the two countries. According to Rajji, the new Syrian administration recognizes Lebanon as an independent state, in contrast to previous governments, particularly the Bashar al-Assad regime.

The Lebanon-Syria border dispute is a long-standing issue stemming from the absence of a clearly defined and mutually recognized border. The ambiguity has fueled clashes, territorial tensions, and rampant smuggling-particularly after the collapse of the Assad regime and the weakening of Hezbollah's regional influence. The Iranian-backed group has historically operated across the border with limited oversight, complicating efforts to enforce sovereignty and curb illicit activity.

The latest development signals a potential turning point in Lebanese-Syrian relations and could pave the way for improved border management and regional stability.

• Tax revenues rise by 16.7%, led by strong corporate and personal income tax performance
• Investment spending increase to MAD 43.7bn, with 41.4% execution rate
• Financing needs reach MAD 44.6bn, covered mainly by external borrowing and domestic markets

The finance ministry reported a budget deficit of MAD 26.7bn in Jan-May, compared to MAD 17.7bn during the same period of the previous year. The deficit accounted for 46% of the annual target, suggesting budget execution is more or less in line with the annual plan. The ministry noted the first five months were marked by a generally favorable environment, marked by the return of rainfall after six years of drought and continued growth in non-agricultural sectors, notably construction, industry, and tourism.

Ordinary revenues increased by 16.9% y/y, reaching a realization rate of 40% of the annual forecast. Fiscal revenues were up 16.7% y/y, driven by a strong performance in corporate income tax (+34.5%), personal income tax (+27.6%), and VAT on imports (+7.1%). Notably, VAT refunds nearly doubled to MAD 8bn, reflecting intensified efforts to clear tax credits. Non-tax revenues rose by 25.2%, particularly from Bank Al-Maghrib and public entities.

Total expenditures reached MAD 185bn, rising by faster 20.8% y/y. Ordinary spending totaled MAD 154bn, which is an increase by MAD 26.2bn, or 20.5% y/y. The rise came mainly from 11.2% increase in the salary bill and 53.6% surge in spending on goods and service. Debt service costs rose by 23.8% on higher interest payments on internal debt. Subsidies spending fell by 28.8% or MAD 3.7bn due to reduced butane gas, sugar, and flour subsidies and the end of transport sector aid. Investment spending increased by 21% y/y to MAD 43.7bn, with a 41.4% execution rate.

The budget deficit, combined with a MAD 17.8bn reduction in outstanding operations, resulted in a financing need of MAD 44.6bn. This was covered by MAD 14bn net domestic borrowing and MAD 27.8bn from external sources, including MAD 20.9bn from international financial markets

The central government budget closed 2024 with a deficit of MAD 60.9bn. The deficit thus accounted for 3.9% of GDP, marking an improvement compared to the 4.4% deficit in 2023 and fell below the 4% target set by the 2024 Finance Law. The government targets a gradual reduction in the budget deficit to 3.5% of GDP in 2025 and 3% in 2026 and 2027. Data so far, suggest the ministry is on track to meet its target though balance of risks for the fiscal path lies in maintaining expenditure discipline going forward.

• Iran-Israel confrontation had no visible effect on PMI reading, confidence rises further
• New orders and output expand robustly, staff levels rise at strongest rate since 2011
• Input inflation quickens in June as material costs and wage costs keep rising

The headline seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI) rose to three-month high of 55.8 in June from 55.8 recorded in May, remaining firmly in expansion territory. We thought that the escalation between Israel and Iran would drag on optimism, but PMI figure show that the non-oil economy is not worried about the potential negative geopolitical effects. Most of the sub-categories expanded at a faster pace compared to May, with new orders expanding at the strongest rate in four months. Domestic sales were the primary driver of this upturn, while sales to foreign clients increased only slightly. The non-oil companies usually attribute the solid growth of the private economy to positive economic conditions, robust customer demand and large infrastructure and development projects. Consequently, the non-oil firms reported a strong increase in business activity and hired additional staff for 14th month in a row. In fact, staffing growth was the highest since 2011, as firms continue to build their overall capacity.

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The strengthening domestic demand is a welcomed news for Saudi Arabia, which wants to reduce its dependence on the oil sector. Overall, domestic demand remains healthy, which supports higher investments, job creation, and overall economic stability. However, the robust expansion of the non-oil private economy was accompanied by rising cost pressures, especially for materials and wages. Input costs continued to increase in the month, and wage inflation rose at the fastest rate since the survey began in 2009. Consequently, selling prices rose robustly and at the strongest recorded since the end of 2023, following reductions in two of the past three months. The increase was mostly attributed to the pass-through of rising overheads to clients, although some businesses opted to cut prices as part of competitive pricing strategies. Strong competition in the retail segment continues to limit the extent to which companies could pass higher costs onto consumers.

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Overall, business expectations have improved notably on the back of improving market conditions and strong demand and PMI surveys point towards strong non-oil GDP growth during Q2 despite the spillover effects from weaker oil prices. Under the economic transformation program of the government, the non-oil economy has turned into the main driver of economic activity. Its growing capacity to absorb labour and attract investments has made the Saudi economy more resilient to oil price swings, but we think the weak oil prices, the geopolitical shocks, and the disruption of global supply chains, will negatively affect the broader economy later this year.

• Unemployed youth to be prioritised over dismissed officials in reshuffle

Tunisia's President Kais Saied ordered a comprehensive restructuring of numerous inefficient institutions wasting public funds. During a meeting at the Carthage Palace on Wednesday with Prime Minister Sara Zaafrani Zenzeri, he instructed that those who failed to fulfil their responsibilities be dismissed and replaced. The President emphasised the need to overhaul institutions that were financially draining the country's resources. He highlighted the importance of developing comprehensive national solutions across all sectors to improve efficiency and accountability. President Saied stated that individuals unemployed for extended periods deserved opportunities more than those being removed for underperformance. He said that these new appointees, though possibly lacking experience, were motivated by a strong desire to contribute to nation-building and fight corruption.

We note that it remains unclear which specific institutions will be subject to restructuring or when the implementation timeline will commence. While the authorities have not provided estimates of the potential fiscal savings, we note that any such reform is likely to generate both budgetary gains and associated costs. In particular, while reductions in recurrent expenditure may improve fiscal sustainability over the medium term, near-term outlays such as severance payments and administrative transition costs could partially offset initial savings. We further note that the move coincides with preparations by the government to draft next year's budget.

• UNDP envoys says inter-ministerial approvals can take up to four months

The UNDP has USD 60mn available to finance projects in Angola in 2025, with around 50% of the funds already executed, UNDP's deputy resident representative Gabriel Dava revealed on Wednesday. Most funding was channeled into the health sector through the Global Fund, targeting HIV, malaria, tuberculosis, vaccinations, and essential medicines. Other focus areas include environment, sustainable energy, and agriculture. However, Gabriel Dava criticized bureaucratic delays, noting inter-ministerial approvals can take up to four months. He stressed the importance of the Angolan government taking greater ownership in project monitoring to ensure development objectives are met.

• High external debt, institutional weaknesses, legacy of political instability undermine donor confidence

Angola received over USD 4bn in development financing from multilateral institutions between 2019 and 2023, according to a study by PwC Angola. The World Bank has been the main international lender accounting for the bulk -- 83% in 2023 alone. PwC Angola highlighted that high external debt (USD 43.3bn), rising global interest rates, institutional weaknesses, and a legacy of political instability have constrained Angola's access to multilateral funding. Bureaucracy, fragmented project monitoring, and exchange rate volatility further undermine donor confidence. PwC emphasized the need for streamlined project management, improved institutional capacity, and greater transparency to better harness multilateral resources, especially for economic diversification and energy transition.

• Govt aims stabilize oil output through reinvigoration of production form mature fields

The arrival of the SMS ESSA Probe jack-up rig in Soyo marks the beginning of a major redevelopment campaign in Block 2/05, operated by Etu Energias alongside partners Poliedro, Kotoil, Falcon Oil, and Prodoil, the oi sector regulator ANPG said in a press release. The new equipment will involve drilling at least three development wells, one exploration well, and conducting five workovers, aligned with the consortium's minimum work commitments approved by the ANPG. The probe, built in 2020, is technically advanced and suitable for shallow offshore operations. The ANPG and Etu Energias highlight this as a sign of growing national capacity in oil production, with expectations that this move will help boost Angola's crude output and support long-term sectoral growth.

To mitigate natural declines from long-term extraction activities, the government introduced a special legal framework in 2024 aimed at increasing production from mature fields. The ANPG's current strategy aims at stabilizing oil production at around 1.1mn bpd. The regulator is also expected to launch another oil concession tender by the end of the year.

• Kenya trialled 50MW flow from Ethiopia to Tanzania via regional grid
• 400kV Suswa-Isinya line load rose from 225MW to 262MW
• Corridor backed by World Bank, AfDB, AFD, and EIB for regional integration

Kenya successfully tested the transmission of 50 megawatts of electricity from Ethiopia to Tanzania, reinforcing Ethiopia's growing role as a regional electricity exporter. The test was conducted by the Kenya Electricity Transmission Company (KETRACO) and increased the load on the 400-kilovolt Suswa-Isinya line from 225MW to 262MW. The line forms part of the cross-border corridor under the Eastern Africa Power Pool (EAPP), which includes 13 member countries working to build a regional electricity market. The power corridor was financed by Kenya's National Treasury alongside international financiers the World Bank, African Development Bank, French Development Agency, and European Investment Bank. The project aimed to facilitate Ethiopia's surplus hydropower exports to neighbours to the south. Ethiopia currently supplied about 200MW to Kenya under a long-term power purchase agreement.

The test followed concerns raised by a nationwide blackout in Kenya in December 2024, which stemmed from instability on the Kenya-Tanzania transmission line. The incident highlighted both technical and regulatory challenges in managing a fast-integrating regional grid. The Kenya-Tanzania interconnector, which extended to Arusha, was expected to link further to Zambia, creating a potential backbone for broader Eastern and Southern African grid integration.

We recall that in March, Ethiopia entered into an agreement to export 100MW of electricity to Tanzania, with Kenya's transmission infrastructure being used for the power transfer. The agreement, initiated by Ethiopian Electric Power (EEP) and Tanzania Electricity Supply Company Limited (Tanesco), will see Ethiopia's electricity transmitted to Tanzania via Kenya Electricity Transmission Company's (Ketraco) transmission lines. As part of the deal, Kenya will charge a wheeling fee for the use of its transmission lines. Furthermore, the operational Kenya-Ethiopia interconnector, which began in 2022, allows Kenya to import electricity from Ethiopia's Grand Ethiopian Renaissance Dam (GERD).

• IMF praises Ethiopia's progress with stronger gold exports and borrowing freeze
• Fund says international reserves rose from 0.6 to 1.7 months of imports
• Total disbursements under the arrangement now stand at USD 1.87bn
• IMF projects GDP growth at 6.6% in 2024/25 with inflation declining to 12.2% by 2025/26

The IMF Executive Board completed the third review of Ethiopia's USD 3.4bn Extended Credit Facility (ECF) arrangement, allowing an immediate disbursement of USD 262.3mn. The total disbursement under the programme reached USD 1.873bn. The IMF commended Ethiopia's progress in meeting all performance criteria, especially improvements in net international reserves driven by strong gold exports and a freeze on non-concessional borrowing. Inflation declined from 26.6% in 2023/24 to a projected 16.6% in 2024/25, supported by tight monetary and fiscal policies. The real effective exchange rate corrected misalignments, while international reserves rose from 0.6 to 1.7 months of imports. Reforms in the FX market enhanced transparency, reduced costs, and eased current account restrictions. The IMF called for continued tight policy stances to sustain disinflation and FX market stability.

Real GDP growth stood at 8.1% in 2023/24 and was projected at 7.2% for 2024/25. However, public debt rose sharply to 49.8% of GDP due to restructuring needs. The IMF welcomed the authorities' good faith efforts in securing comparable treatment from commercial creditors under the G20 framework. Despite reforms, the IMF flagged downside risks, including geopolitical tensions, declining donor support, and domestic vulnerabilities. It urged continued revenue mobilisation, legal reforms at the central bank, and improved SOE governance to restore fiscal space and debt sustainability.

We recall that in May, the Fund and Ethiopian authorities have reached staff-level agreement on the third review of Ethiopia's four-year USD 3.4bn ECF arrangement. At the time, IMF staff noted that Ethiopia's macroeconomic performance has "exceeded program expectations," with inflation outcomes, goods export growth, and international reserve levels all substantially better than forecast. With the debt restructuring deal now agreed with commercial creditors, Ethiopia will turn to finalizing existing debt liabilities with private bond holders, a process local media reports say may be concluded in H2 this year.

The IMF recently revised upwards its 2025 GDP growth forecast for Ethiopia to 6.6% from 6.5% projected in its October 2024 WEO report, according to the latest WEO report. Average CPI inflation was revised downwards to 21.5% in the latest publication from 23.3% reported in the October 2024 WEO publication. The Funds own second ECF review noted that inflationary pressures had eased more quickly than projected and hard-currency reserves have risen faster under the program's conservative monetary and fiscal measures, underpinning the modest upward revision of the 2025 GDP forecast. The Fund now sees GDP growth at 7.2% while average CPI is forecast at 16.6% in FY 2024/25 in its latest press release after completing the third ECF review. The CA deficit is projected at a 2.9% in FY 2024/25 and is expected to remain unchanged in FY 2025/26.

• Official lenders co-chaired by China and France granted USD 3.5bn in relief under G20 Common Framework
• No details have been released yet on the contents of the MoU
• Private bondholder deal expected in H2 with maturity extensions preferred over principal haircuts, according to local media reports
• Ethiopia's external public debt stood at USD 28bn end-2024 according to media reports

Ethiopia agreed a long-awaited debt restructuring deal with its Official Creditor Committee, securing over USD 3.5bn in relief, according to a statement released by the Finance Ministry. The Memorandum of Understanding (MoU), signed with creditors co-chaired by China and France, formalised terms initially reached in March this year. The agreement cleared the way for bilateral implementation and was hailed by the Ministry of Finance as a "milestone" in Ethiopia's efforts to restore debt sustainability. The deal followed the IMF's approval of a USD 3.4bn Extended Credit Facility (ECF) in July 2024, supporting the Homegrown Economic Reform Agenda. The programme aimed to address macroeconomic imbalances and encourage private-sector-led growth. The IMF disbursed USD 1.61bn to date, including USD 248mn after the second programme review. Authorities committed to FX liberalisation, central bank reforms, and fiscal transparency.

We recall that Ethiopia defaulted on its sole USD 1bn Eurobond in December 2024 and remained in talks with commercial creditors. Officials said private restructuring would adhere to the G20 comparability-of-treatment principle, requiring equal terms to those granted by official lenders. Talks had stalled pending progress with bilateral creditors and confirmation of IMF backing. Public debt stood just below 50% of GDP at end-2024, with a large portion owed to China under the Belt and Road Initiative. The IMF welcomed recent reforms but flagged lingering risks tied to low reserves, conflict legacy, and external shocks.

We note that although the exact details of the deal were not disclosed, prior to finalizing this deal, local media reports stated that official creditors hold about 40% of Ethiopia's total external public debt, which stood at roughly USD 28bn at the end of 2024. Talks with private creditors such as BlackRock and Amundi remained ongoing, with an agreement expected in the second half of the year. The media reports further noted that Ethiopia was likely to choose maturity extensions over principal haircuts, reflecting improved fiscal discipline under its IMF programme and reluctance among creditors to accept nominal losses. We further note that recently, the FinMin had indicated that despite the restructuring, actual external debt payments would increase as Ethiopia prepared to resume repayments under revised terms starting in 2026.

In May, the IMF and Ethiopian authorities have reached staff-level agreement on the third review of Ethiopia's four-year USD 3.4bn Extended Credit Facility (ECF) arrangement. Subject to approval by the IMF Executive Board, Ethiopia would gain access to about USD 260mn (SDR 191.7mn), bringing total ECF disbursements to roughly USD 1,849mn since the program's launch in July 2024 as part of a broader USD 10.7bn international support package. The agreement represented progress for the G20 Common Framework after years of delays and positioned Ethiopia's restructuring as a potential model for future sovereign debt deals. The IMF has slightly revised upwards its 2025 GDP growth forecast for Ethiopia to 6.6% from 6.5% projected in its October 2024 WEO report, according to the latest WEO report. The Fund now sees GDP growth at 7.2% while average CPI is forecast at 16.6% in FY 2024/25 in its latest press release after completing the third ECF review. The CA deficit is projected at a 2.9% in FY 2024/25 and is expected to remain unchanged in FY 2025/26.However, public finances remain vulnerable.

• Programme estimated to cost USD 4bn, of which govt to secure USD 300-400mn
• Government plans to provide tax and regulatory incentives for participating companies
• Programme aims to create 1.7mn new jobs

President John Mahama officially launched the 24-hour economy programme which he described as a "national reset" and a "bold strategic shift" in policy aimed at unlocking the country's full economic potential. It aims to boost productivity, accelerate exports and create business opportunities in key sectors such as agriculture, pharmaceuticals, manufacturing, logistics, infrastructure, and textiles.

The implementation of the programme is estimated to cost USD 4bn with the government committing USD 300-400mn as "seed funding" for the establishment of the 24-Hour Plus Authority and developing bulk infrastructure. The rest is planned to be secured through public-private partnerships. The financing for the businesses that participate in the programme will be secured through commercial banks and development finance institutions, including the Development Bank Ghana which will provide long-term, low-interest loans to businesses. However, no more details or projections were provided on the funding model.

The programme has two main components - providing direct incentives to businesses to encourage them to increase their operating hours, and implementing reforms to support the continuous production model. The incentives include tax breaks and regulatory measures such as exemption from import duties on manufacturing equipment, renewable energy systems, raw materials, and logistics infrastructure, as well as exemption from corporate income atx for firms operating in strategic agriculture sectors such as grains, vegetables, oilseeds, tubers, livestock, and sugar. Other businesses will be offered rebates from the corporate income tax rate if they introduce two- or three-shift work. Some VAT exemptions will also be offered to lower the cost of locally produced goods. The measures will be laid out in legislation that should be passed in parliament.

The government also plans to build large industrial parks in every region to support the programme implementation. These will have own power generation facilities, mainly from solar and biogas and will be located near newly designated agroecological zones along the Volta Basin. The zones will combine farming and agro-processing with irrigation systems fed by the Volta Lake. The plans also include setting up urban farming clusters near major cities to reduce supply chain costs, integrate production and logistics, and enable continuous economic activity. The ultimate and quite ambitious goal is to create 1.7mn jobs over four years.

24-Hour Economy policy will be private sector led - Haruna Iddrisu (Joy FM)

Fuel price adjustment: Petrol down, diesel up at GH₵13.25 per litre (Joy FM)

Seven new Supreme Court Justices to be sworn in today (Citi Newsroom)

Mahama confers Ghana's Highest Honour on Indian PM Modi (Citi Newsroom)

NPP rejects EC's decision to rerun Ablekuma North polls (Citi Newsroom)

EC sets July 11 for Ablekuma North parliamentary rerun in 19 polling stations (Daily Graphic)

EC recommends compulsory voting to reduce electoral waste as 7 million abstain in 2024 (Starr FM)

W/R: GoldBod taskforce cracks down on 10 Chinese gold smugglers (Class FM)

• Review to provide update on economic and fiscal performance
• It should also outline policies until the end of the year
• Deputy finance minister says it will provide update on arrears to road contractors

Finance minister Cassiel Ato Forson told Bloomberg that the mid-year budget review would be presented in parliament on Jul 24. The budget review should provide an update on the budget implementation and overall economic performance in H1, as well as an outlook and policies for the rest of the year and potential new revenue or expenditure measures.

Speaking on the matter, deputy finance minister Thomas Ampem Nyarko said that one of the issues that would be clarified would be outstanding payments owed to road contractors. Speaking to Citi FM, he said that an audit of the arrears to contractors had been completed by the auditor-general and the findings would be revealed in the mid-year budget review alongside plans for the settlement of the verified arrears. Nyarko further noted that the government has already allocated GHS 13bn for arrears clearance in the 2025 budget and it would be implemented rigorously.

We note that the 2025 budget was presented with a deficit on cash basis of 4.1% of GDP, down from actual 5.2% in 2024 (revised target of 5.3%). The deficit on commitment basis is projected at 3.1% of GDP, down from actual 7.9% in 2024 (revised target of 5.3%)

• Food, transport remain biggest downward contributors as some food, fuel prices fall
• At same time, housing and utilities inflation picks up due to higher rent, electricity prices
• Continued disinflation might create room for rate cut at MPC meeting this month

The CPI inflation rate fell to 13.7% y/y in June from 18.4% y/y in May, hitting its lowest level in 42 months. The slowdown was broad-based and largely due to the strengthening of the cedi. The biggest downward contributions came from the food and transport categories, as well as alcoholic drinks and tobacco. In the case of food, the slowdown was due to drops in prices of some foods, mainly fruits and nuts, cocoa drinks, cereals and some vegetables. As for transport, prices in the category dell by 10.8% m/m and 8.5% y/y which is due to the drop in fuel prices during the month. Most of the other categories also posted slower price growth with the notable exception of housing and utilities where prices grew by 24.9% y/y, up from 21.6% y/y in May. The acceleration reflected an increase in rents, electricity, refuse disposal and charcoal prices.

Data Download

According to the statistical office data, core inflation (excl. energy, utilities and volatile food prices) slowed markedly to 8.8% y/y in June to 18.5% y/y in May. The core print excluding energy, utilities and transport prices also fell to 8.3% y/y from 19.5% y/y. We note that these numbers differ from those released by the central bank in relation to the recent MPC meeting but still show downward inflation movement.

With the latest print, inflation has now slowed for six consecutive months, and the disinflation process is expected to continue, driven by the cedi strengthening and the tight monetary policy stance. The central bank left the policy rate unchanged at 28% at its MPC meeting in May, saying that despite the positive macroeconomic developments, inflation remains elevated and there is a need to support the disinflation process further. The central bank expected that the headline inflation would slow faster towards the target range of 6-10% in Q1 2026 and the government targeted 11.9% eop inflation this year. The latter appears feasible despite the potential upward impact of the higher energy levy. The disinflation could allow the central bank to cut rates at its MPC meeting later this month.

• Marginal slowdown reflects worse performance of manufacturing, tourism and transport
• Print is marginally lower than CBK's latest projection for the quarter (5.0%)
• CBK forecasts full-year growth at 5.2%, up from 4.7% in 2024

Kenya's GDP growth printed at 4.9% y/y in Q1, edging down from 5.1% in the preceding quarter, and largely unchanged vs. Q1 2024. The marginal downturn was underpinned by lower growth / sharper contraction across several economic sectors, including manufacturing, accommodation & restaurants, transport, and real estate, mostly offset by uptick in others, the report published by the statistics office showed.

Data Download

In the breakdown (y/y), in agriculture, the largest contributor to the overall growth rate (1.1pps in the review quarter), growth picked up to 6.0% from 4.3% in the preceding quarter, and 5.6% a year earlier. The real estate sector was the second largest contributor to growth in Q1 (0.5pps), with the sector's growth increasing to 5.3% y/y from 3.6% in Q4 202, albeit down from 6.9% in Q1 2024. The trade, and the financial and insurance sectors also remained important contributors to growth (each with 0.5pps), followed by the transport sector (0.3pps). Also worth noting, the performance of the manufacturing sector, consistently flagged as key for the country's development, worsened, with growth decelerating to 2.1% y/y in Q1, down from 3.9% in Q4 2024, but marginally up from 1.9% in Q1 2024. Its contribution to the overall growth rate remained minimal, at 0.2pps.

The Q1 outturn is marginally below CBK's latest projection for the quarter (11 June), which stood at 5.0%. At the time CBK forecast growth would pick marginally up to 5.2% in Q2, with the full year growth also reaching 5.2%, up from 4.7% in 2024.

• Mission conducted at authorities' request
• Draft reform plan expected by year-end

An IMF technical mission concluded a two-week governance diagnostic in Kenya on 30 June 2025, the Fund said in a press release. The mission, conducted at the request of the Kenyan government, aimed to assess critical governance gaps and corruption risks with macroeconomic implications.

The team, led by Rebecca A. Sparkman, included staff from several IMF departments and the World Bank. They held discussions with officials from key government ministries and oversight institutions covering areas such as public finance, taxation, procurement, the mining sector, financial regulation, and anti-money laundering. Consultations were also held with MPs, civil society, business groups, and international development partners.

The review forms part of the IMF's 2018 framework for Enhanced Engagement on Governance and is intended to inform a reform roadmap with actionable and sequenced recommendations. A draft report will be shared with the Kenyan authorities for feedback before the end of 2025, ahead of finalization of the action plan.

Nigeria's Zenith Bank in talks to buy Kenya lender (Business Daily)

UK, US top recipients of hard cash from Kenya (Business Daily)

Haiti a year later: Milestone amid losses, hope (Nation)

Murkomen unfit to hold office, petitioners say (Nation)

United in greed: MPs close ranks, pass NG-CF Bill (Nation)

Many Kenyans knowingly buy fake products - report (Nation)

Abductors' playground: Violent arrests rock Kenya as courts summon Amin (The Standard)

I'm alive and safe - Blogger Ndiang'ui speaks from hideout (The Star)

• S&P Global PMI fell to 50.1 in June from 50.8 in May
• Output and new business volumes declined
• Input prices rose sharply, led by wholesale and retail sector inflation
• Business confidence weakened, hitting its lowest level since 2021

The S&P Global private sector PMI edged down to 50.1 points in June from 50.8 points in May, the latest release showed on Thursday (Jul 3). While this still indicates marginal growth, it reflects a notable slowdown in momentum. Output across the private sector contracted in June, reversing May's strong performance. This downturn was the first in three months and affected most sectors apart from services. Similarly, new business volumes fell for the first time since March, primarily due to continued weakness in export orders which have now declined for three consecutive months. Input prices rose strongly. Wholesale and retail sectors recorded the steepest inflation, driven by both higher purchase prices and rising wages.

Data Download

Despite weakening output and new business, firms added staff for the second time in three months. The survey also observed a modest improvement in supply conditions, supported by fewer port disruptions and reduced input demand. However, confidence among businesses continued to soften, with fewer firms expecting output to increase in the near term. Optimism was supported by new project initiations and efforts to attract customers, but this was outweighed by concerns over domestic and international policy uncertainty. As a result, overall sentiment about future activity fell to a nearly four-year low. According to S&P, while the PMI reading for June was weaker, it still outperformed the figures from the first quarter and this suggests a solid Q2 GDP performance.

• Treasury cautions that expropriating private shares may violate bilateral investment treaties
• Labour federation COSATU supports EFF's bill to nationalise the central bank

National Treasury has rejected the Economic Freedom Fighters' (EFF) proposal to nationalise the South African Reserve Bank (SARB), warning that such a move could expose the country to international legal challenges. During public hearings on the South African Reserve Bank Amendment Bill on Wednesday (Jul 2), Treasury official Christopher Axelson cautioned that expropriating the SARB's privately held shares (particularly those owned by foreign investors) would violate bilateral investment treaties and could lead to lawsuits against South Africa in international courts.

The bill is sponsored by EFF leader Julius Malema and seeks to transfer all privately held shares to the state and expand the finance minister's powers over the central bank. It was originally introduced in 2018 by Malema, after which it lapsed twice and was revived by parliament's finance committee last year. However, it is unlikely to pass. After endorsing nationalisation in 2017, the ANC has since softened its position

Although the bill does not alter the reserve bank's mandate or independence, Axelson noted that nationalisation could still undermine investor confidence. He argued that even if the bank's formal role remains unchanged, the perception of increased political control and the precedent of expropriation could damage South Africa's credibility with current and future investors. Despite Treasury's opposition, the bill has gained some support, notably from labour federation COSATU which agrees with the call for the state to take full ownership of the bank.

• DA and other parties voted against human settlements and higher education budgets
• Minister Simelane faces corruption allegations; Nkabane is accused of lying to parliament

The Democratic Alliance (DA) and several opposition parties voted against the departmental budgets for human settlements and higher education this week, citing serious allegations against the respective ministers. Human settlements minister Thembi Simelane has been accused of corruption, while higher education minister Nobuhle Nkabane allegedly lied to parliament. The DA's decision followed president Cyril Ramaphosa's dismissal of DA deputy minister Andrew Whitfield for travelling to the US without permission.

The DA views Whitfield's actions as a minor infraction compared to the unresolved allegations against Simelane and Nkabane. The party criticised the president for relocating Simelane from justice to human settlements rather than removing her from Cabinet, saying it showed a lack of political will to act against serious misconduct. Nkabane was condemned by several opposition parties during her 2025/26 higher education budget presentation, with the DA, EFF and MK party rejecting the proposal and accusing her of political misconduct.

Minerals Council lashes export taxes on chrome (Business Day)

Legal opinion could upset DA's budget vote plans (Business Day)

Transnet seeks interim private sector investment (Business Day)

State does not support amendment bill to nationalise SA Reserve Bank (Business Day)

Platinum price surge to boost SA mining projects (News24)

DA and ANC parliamentary war continues, with RAF the latest battlefield (News24)

Simelane unmoved by DA's campaign to oppose R33bn human settlements budget (News24)

Scopa 'inquisition' into the RAF set for September (Moneyweb)

Treasury warns against changing Sarb ownership (Moneyweb)

Sarb nationalisation debate in Parliament opens a legacy hornet's nest (Daily Maverick)

Transnet extraction - where and how Gupta bribes were paid to Big Four accused (Daily Maverick)

• Survey respondents lowered average inflation forecast for 2025 to 3.9% from 4.4%
• Inflation expectations for 2026 and 2027 were also revised down
• Analysts are the most optimistic; trade unions are the most pessimistic

The average inflation expectations of analysts, business people and trade unions for the current year were revised down slightly in Q1 2025 to 3.9% from 4.4% in the previous survey, the Bureau for Economic Research said in a statement on Wednesday (Jul 2). Expectations for 2026 and 2027 were also lowered to 4.3% and 4.5%, from 4.6% and 4.7% respectively. It marks the first time since 2020 that the one-year-ahead forecast dropped below 4%. This shift occurred alongside a decline in actual inflation, which eased from 3.0% in December 2024 to 2.8% in April 2025.

Expectations remain differentiated across groups. Analysts are the most optimistic, expecting 3.4% inflation this year followed by a gradual rise to 4.2% by 2027. Business people expect a higher 2025 figure of 4.3% with inflation expected to reach 4.5% in 2027. Trade unions also forecast a continued upward path, with inflation reaching 4.7% in 2027 from 4% in 2025. Trade unions' longer-term expectations have moderated since the Q1 survey, when they projected inflation to reach 5.0% by 2027.

Over the next 5 years, inflation expectations also moved lower since Q1, averaging 4.4%, from 4.7% previously. Analysts again forecast the lowest rate at 4.0%, while business people and trade unions expect inflation closer to the SARB's midpoint target of 4.5%. This represents a more stable inflation outlook than in previous surveys. The decline in inflation expectations has not carried over to wage growth forecasts, which were revised upward in the survey in the same period.

Overall, while inflation expectations have eased meaningfully, the survey does not point to a broad-based downward shift in sentiment. Two of the three social groups (business people and trade unions) still expect inflation to accelerate after 2025, remaining around the SARB's 4.5% target midpoint. Against this backdrop, and with wage expectations trending higher, the inflation outlook remains somewhat uncertain. This comes as the SARB is actively reviewing its inflation-targeting framework, with a strong push from both the central bank and investor communities to lower the current 3-6% target range to a tighter point.

• New orders, output and employment continue rising
• Input costs increase but output prices stagnate
• PMI signals strong private sector activity in Q2

The Stanbic Bank Uganda PMI declined slightly to 55.6 index points in June from 56.4 in May but continued signalling robust growth in private sector activity. The strong result reflected continued growth in both new orders and output, as well as further rise in employment and purchasing activity. The pickup in new business was due to continued strong demand and attraction of new clients. Input costs continued growing due to rise in fuel, material and staff costs, but companies were hesitant to pass higher costs to clients and output prices were little changed. Business sentiment remained positive as companies expected output growth over the next 12 months thanks to their investment in marketing and advertising.

Data Download

The PMI data indicates robust growth in private sector activity in Q2 2025 after more subdued results in Q1. According to the latest available data, GDP growth picked up to 8.6% y/y in Q1 from 5.3% y/y in Q4 2024, which was driven by services and agriculture while industrial growth slowed. The PMI results suggest growth momentum should be maintained in Q2. The IMF forecasts GDP growth to ease slightly to 6.1% this year from 6.3% in 2024, supported by oil and gas investment, and low inflationary environment, but the global uncertainty remains a major risk. Growth is seen to pick up strongly to over 7% over the longer term as the country starts producing oil in 2026.

• Yield on 91-day T-bill flat, yields on 182-day and 364-day T-bills fall 40-50bps
• Govt securities sold in FY 2024/25 exceeded plan by 20%
• This year's issuance plan is slightly lower at UGX 21.4tn

The government sold UGX 371bn T-bills at the auction held on Jul 2, exceeding slightly the UGX 355bn target as demand remained solid with a subscription rate of 1.7, unchanged from two weeks earlier. The yield on the 91-day T-bill remained flat for a third consecutive auction, while the yields on the 182-day and 364-day T-bills declined by 40-50bps.

This is the first auction of the 2025/26 fiscal year. The total issuance for the 2024/25 year amounted to UGX 25.5tn, which was 20% above the revised issuance plan (UGX 21.3tn) as the government resorted mainly to domestic borrowing to compensate for lower-than-expected external funding. The issuance plan for this fiscal year is UGX 21.4tn of which UGX 10tn to be to roll over existing debt and UGX 11.4tn as new borrowing. It is lower than in the preceding year as the government expects more external financing given the WB's decision to unfreeze lending to the country.

Economist seeks fresh approach to Zambia's national budgeting process to unlock inclusive, resilient growth (Zambia Monitor)

Chief Chanje describes 2024-2025 tobacco marketing season as worst, alleges rampant corruption by field officers (video) (Zambia Monitor)

Zambia backs Seville Commitment, calls for financial reforms, stronger global accountability (Zambia Monitor)

Zambian govt, late President Lungu's family hold further dialogue over burial arrangements, Mweetwa says (Zambia Monitor)

Zambia must broaden economy for shared growth - World Bank (Zambia Monitor)

Zambia's population growth outpaces economy, threatens sustainable development - Mutombo (Zambia Monitor)

DEC arrests Chinese nationals, Zambians in drug trafficking raids (Zambia Monitor)

Put your house in order, Speaker Mutti tells 'disorderly' PF MPs (News Diggers)

Life expectancy higher for females than men - 2022 Census Analytical Report (News Diggers)

We won't withdraw Bill 7, we'll follow ConCourt's guidance - ATTORNEY General (News Diggers)

UNCTAD rates Zambia as one of Africa's leading reform-driven economies (News Diggers)

• Private sector expected to finance 90% of total investment
• Copper exports projected to average 43% of GDP by 2040 under ambitious scenario
• Inflation risks and policy gaps threaten inclusive growth

According to the World Bank's latest Zambia Economic Update (ZEU) titled "Leveraging Energy Transition Minerals for Economic Transformation," achieving Zambia's goal of producing 3mn tonnes of copper annually will require cumulative investments of USD 14bn by 2030 and USD 32bn by 2040. Nearly 90 percent of these funds are expected to come from the private sector, underscoring the urgent need to improve Zambia's investment climate. The report presents two scenarios: business-as-usual (BAU) and an ambitious unconstrained path aligned with government targets. Under the latter, private investment would average 31 percent of GDP between 2025 and 2040 five percentage points higher than BAU driving substantial copper output growth and boosting exports to average 43 percent of GDP. Despite increased machinery imports during investment phases, the current account is projected to remain in surplus.

Investment needs extend beyond mining to electricity generation, transport infrastructure, and institutional reforms. The report emphasizes expanding Energy Transition Minerals production, building a skilled workforce, and ensuring equitable benefit-sharing. These efforts aim to support sustainable, long-term economic transformation. The World Bank cautioned that without new policy interventions, rapid investment and export growth could fuel inflationary pressures and limit household consumption gains. Real incomes per capita are forecast to rise modestly from USD 1,846 under BAU to USD 2,164 by 2040 (in 2023 constant prices). Although Zambia has strong ESG regulations, challenges remain in enforcement, highlighting the need for sustainable development principles to guide mining activities.

We recall that the WorldBank's June Global Economic Prospects report estimates a recovery to 5.8 % in 2025. Growth is then expected to strengthen further to 6.4% in 2026 and 6.5% in 2027 as global headwinds abate and domestic policy remains supportive. Government expects growth to pick up to 6.6% this year driven by stronger mining output although this remains overly ambitious given the ongoing power challenges.

• Board Chairperson says 1,000MW solar target by year end achievable
• Announces additional 25MW solar plant came online following 100MW Chisamba facility

Zesco Board Chairperson Vickson Ncube said he was confident that load shedding would end by December 2024. Speaking on Diamond TV, Ncube stated that the country had enough pipeline projects, driven by both the private sector and Zesco, to solve the load shedding challenge. "We first mitigated, then eliminated the problem. We aim to achieve 1,000 megawatts of solar power this year and even exceeded this target," he said. Ncube added that solar energy formed the core of their diversification strategy to prevent future power shortages.

Ncube explained that Zambia's energy deficit ranged between 1,000 and 1,200 megawatts. At peak times in December, the country imported up to 550MW, while previously exporting 350MW. To manage the gap, Zesco reduced exports to 130-150MW, mainly contractual. Out of total generation of 1,800MW, about 900MW served exempt loads such as mines, critical to the economy and foreign exchange. Another 400MW covered other exempt demands. Ncube noted that power supply improvements began around the recently commissioned 100MW Chisamba Solar Power Plant, benefiting local communities that hosted the infrastructure. He added that another 25MW solar plant near Serenje came online recently. Ncube emphasized that while solar's variability was natural, it remained a key solution to Zambia's power challenges.

We note that to ease power shortages, ZESCO plans to integrate between 500MW and 800MW of solar capacity by end-2025, led by the Chisamba Solar project and several other initiatives totaling at least 566.5MW with confirmed timelines, according to our estimates. As of May 30, Zambia's total electricity generation stood at 1,806MW, against a national demand of 2,400MW-leaving a 594MW shortfall, although a recent 150MW loss at mamba coal plant due to a technical faulty means that the powerdeficit has now risen to 684MW.

• 470 buying depots now open in Lusaka, Southern, Central, and Western Provinces
• Moisture content in other provinces still above required 12.5% storage threshold

The Food Reserve Agency (FRA) started buying maize from farmers in Lusaka, Central, Western, and Southern provinces as moisture levels in these areas reached the optimal 12.5% required for storage. FRA Board Chairperson Suresh Desai said the agency opened 470 buying points across these provinces and expected to begin purchases in parts of Eastern Province soon. Desai explained that maize purchases have not yet started in the remaining six provinces because moisture content in those areas remained high, risking aflatoxin contamination if stored prematurely. He added that buying points in these provinces were already prepared, with staff trained and empty grain bags positioned, awaiting the right moisture conditions. The agency has been active in the four provinces for nearly 10 days. FRA also improved payment processes, promising farmers payment within a week of delivery through multiple platforms, including direct bank transfers, mobile money, digital payments, and physical cash where network access is limited.

We recall that recently, FRA announced that it would buy white maize at ZMW 340 per 50kg bag and paddy rice at ZMW 300 per 40kg bag in the 2024 crop marketing season. The maize price marked a 3% increase from last year's ZMW 330. The latest crop forecast survey put the 2024 maize crop at 3.66mn tonnes, up 142% y/y, and the total maize stocks at 4.04mn tonnes, resulting in a maize surplus of 384,999 tonnes. Maize is a staple food with a weight of 6.5% in the CPI, and the recent drop in its price should have a downward impact on food prices which will likely be reflected fully only in June inflation as price data is collected at the start of the month. CPI inflation for June slowed to 14.1% y/y, down from 15.3% y/y in May, according to the latest data from the statistical office. This deceleration was broad-based, reflecting cooling price pressures in both food and non-food components.