Like their counterparts in advanced economies, monetary policymakers in Sub-Saharan Africa have become more aggressive on interest rates.
On Tuesday, September 27, 2022, the Central Bank of Nigeria (CBN) raised the country’s benchmark interest rate to a 20-year high of 15.5% from a previous 17-year high of 14 percent. This increase was more than expected and made it one of four African central banks to have increased by 300 basis points or more this year.
The CBN announcement came days after the South African Reserve Bank raised its redemption rate by 75 basis points to 6.25% – its sixth consecutive increase.
However, an opposite scenario is playing out in Angola. The central bank lower interest rates last week as inflation continued to decline thanks to the currency’s oil-linked rally.
Market overview
Below is Ventures Africa’s weekly economic summary for the week ending September 30, 2022.
Stock markets
Here’s how stocks fared in major African markets (Nigeria, Egypt, South Africa and Kenya) at the end of the week:
The Nigerian Stock Market ended the week flat, with the NGX All-Share Index falling 0.01% to close at 49,024.16.
Top 5 winners
Multiverse Mining and Exploration Plc – +30.85%
Nigerian Exchange Group – +17.65
Jaiz Bank Plc – +15.38
Cadbury Nigeria Plc – +14.77
Eterna Plc. – +9.91
Top 5 refusals
Neimeth International Pharmaceuticals Plc – -10.26
Nestle Nigeria Plc – -10.00
Africa Prudential Plc – -9.91
Royal Exchange Plc – -9.80
Fidson Healthcare Plc – -9.05
The Egyptian Stock Exchange was slightly bearish as the EGX 30 fell 0.68% to close the week at 9827.46 points.
Top 5 winners
Development and reconstruction of Egyptian housing – + 18.75%
Arabic ceramics (Aracemco) – +9.66%
Atlas for Land Reclamation and Agricultural Transformation – +8.00%
Citadel Capital – +7.38%
Delta Sugar – 5.56%
Top 5 refusals
The Arab Dairy Products Co. Arab Dairy – -7.41%
Lecico Egypt 10.41 – -6.89%
Northern Upper Egypt agricultural development and production – -4.25%
Alexandria Flour Mills – -3.49%
International agricultural products – -2.92%
The South African stock market traded flat during the week, with the JSE All-Share Index gaining 0.1% to close at 63,726.37 points.
Top 5 winners
Brimstone Investment Corp Ltd – +20.52%
Kibo Energy Plc – +20.00%
Jasco Electronics Holdings Ltd – +17.39%
Brimstone Inv Corp Ltd-N – +15.53%
4Sight Holdings Ltd – +9.52%
Top 5 refusals
Ellies Holdings Ltd – -16.67%
Nampak Ltd – -13.15%
Schroder Eur REIT Plc – -13.14%
Stefanutti Stocks Holdings Ltd – -11.11%
Wesizwe Platinum Ltd – -8.57%
The Kenya Stock Market had a bearish week, with the NSE All-Share Index falling 4.14% to close at 128.41 points.
Top 5 winners
Flame Tree Group – +10,327.35%
Nairobi Stock Exchange – +5.13%
Centum Investment – +2.83%
Home Africa – +2.78%
Cooperative Bank of Kenya – +1.72%
Foreign exchange markets
Here is how the currencies of Nigeria, Egypt, Kenya and South Africa have performed against the US dollar in official markets.
- The Nigerian Naira opened the week at N436.33/$1 and closed at N437.03/$.
- The Egyptian pound opened the week at E£19.5/$ and closed at E£19.6/$.
- The Kenyan shilling started the week at 120.70 Ksh/$ and closed at 120.83 Ksh/$
- The South African rand appreciated against the US dollar as it opened the week at 18.06 rand/$ and closed at 17.89 rand/$.
Oil prices
- The price of the OPEC basket of thirteen crudes stood at $92.76 a barrel on Thursday, up slightly from $92.67 a barrel the previous week.
- Brent opened the week at $82.86/barrel and gained 6.1% to close at $87.95/barrel.
- West Texas Intermediate opened the week at $76.71/barrel and climbed 7% to $82.13/barrel.
Crypto Markets
The cryptocurrency market ended the week flat, losing only 0.3% over a 7-day period to reach a market capitalization of $920.11 billion. Here is how the top three cryptocurrencies have fared over the past seven days:
- Bitcoin (BTC) gained 1.25% to trade at $19,038.
- Ether (ETH) fell 1.58% to trade at $1,273.
- Binance Coin (BNB) gained 3.59% to trade at $284.
Technology funding
- Numidaa Ugandan SME lending platform, raised $12.3 million pre-Series A led by Serena Ventures.
- Unchorlight Kenya Limiteda Japanese/Kenyan BNPL vehicle financing platform for motorcycle taxi drivers, raised approximately $623,000 (90 million yen) from Honda Trading and Skylight Consulting.
- Livestock wealtha South African crowdfunding/’crowd-farming’ platform for investment in livestock and agriculture, raised ~$553,000 (ZAR 10 million) of Khulisani Ventures of Mineworkers Investment Company.
- Bitpowera Nigerian blockchain infrastructure provider offering solutions to SMEs for wallets, payments, settlements and cloud and custody services, received $150,000 from 500 Global as part of its acceleration program.
- Drive to Own, a South African vehicle financing platform, raised $100,000 of Mobility 54 as the winner of its 2022 Digital Transformation Challenge for Africa.
- ComiBloca Nigerian crypto investment management platform and robo-advisor, raised an undisclosed amount by Expert Dojo.
Experts
Commenting on the upward trend in interest rates in Africa, Virág Fórizs, Emerging Markets Economist at Capital Economics, believes that we have not seen the end of it, thanks to inflation. “Taking inflation under control is clearly the top priority, but we suspect MPC members also had their eye on strengthening currencies, which have come under renewed pressure. currency and growing balance of payments tensions are likely to trigger significant interest rate hikes in upcoming meetings elsewhere as well, notably in Ghana and Kenya.
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