<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="640" height="360" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/03/istockphoto-1250489640-640x640-1.jpg" alt="" class="wp-image-400524" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/03/istockphoto-1250489640-640x640-1.jpg 640w, https://cms.cnbcafrica.com/wp-content/uploads/2021/03/istockphoto-1250489640-640x640-1-300x169.jpg 300w" sizes="(max-width: 640px) 100vw, 640px" /><figcaption>World Bank on glass building. Image: Flickr</figcaption></figure>



The World Bank said it has approved a $750 million credit line for Nigeria to help the country&#8217;s 36 states push through reforms to attract investment and create jobs.



Several states in Nigeria struggle to pay salaries due to low revenues and resort to borrowing from the domestic bond market and banks to fund infrastructure projects.



The World Bank said Nigeria had made progress in improving the ease of doing business but the country&#8217;s ability to attract domestic and foreign investment remained low compared with others.



&#8220;Private sector investments remain the major vehicle to create more jobs, increase revenues to the states and improve social and economic outcomes for citizens,&#8221; the World Bank&#8217;s country director for Nigeria, Shubham Chaudhuri, said in a statement late on Thursday.



The $750 million credit would improve land administration, telecommunications infrastructure, public-private partnerships, investment promotion and the business regulatory environment, the World Bank said.

istockphoto-1250489640-640×640

World Bank approves $750 mln credit to boost Nigerian reforms

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="443" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/image-4-820x443.png" alt="" class="wp-image-420187" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/image-4-820x443.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/image-4-300x162.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/image-4-160x86.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/image-4-768x415.png 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/image-4.png 877w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>Finance Minister Prof. Njuguna Ndung&#8217;u and CA DG Francis Wangusi Image via: Reuters</figcaption></figure>



Kenya&#8217;s new President William Ruto instructed the finance ministry on Thursday to cut 300 billion shillings ($2.5 billion) from annual government spending this year, to bring the country &#8220;back to sanity&#8221;.



Ruto, sworn in on Sept. 13, appointed his cabinet on Tuesday, naming&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N30Y3ZF&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">former central bank governor Njuguna Ndung&#8217;u</a>&nbsp;as finance minister to navigate the economy through rising inflation, a heavy debt burden and drought.



Ruto also said he aimed to bring the recurrent expenditure down further next year by an undisclosed amount, in a bid to achieve a recurrent budget surplus by the third year.



The president did not give details on the expenditure to be cut. Recurrent expenditure usually includes civil servant salaries, domestic and foreign interest payments, pensions and fuel costs for the government fleet of vehicles.



&#8220;I have instructed Treasury to work with ministries to find savings of 300 billion shillings in this year&#8217;s budget,&#8221; Ruto said in his first speech as president to parliament.



The 2022/23 budget was presented in April.



&#8220;Next year, we will bring it further down so that, by the third year, we have a recurrent budget surplus.&#8221;



The president said the government should never borrow to finance recurrent expenditure, adding, &#8220;the market cannot sustain the kind of borrowing we are doing as a government&#8221;.



&#8220;We must bring ourselves back to sanity.&#8221;



A finance ministry document issued earlier this month showed&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N30L4H7&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">recurrent expenditures</a>&nbsp;were projected at 2.27 trillion shillings or 16.2 percent of Gross Domestic Product in the 2022/23 (July-June) fiscal year.



Ruto became president after winning a closely contested election last month, with campaign pledges to create economic opportunities for the poor.



He faces a very&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N2Z644Z&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">narrow fiscal space</a>&nbsp;to roll out his policies, after his predecessor Uhuru Kenyatta increased public borrowing to fund infrastructure projects.



The finance ministry has forecast economic growth of 5.5% this year compared with 7.5% in 2021, a continuation of recovery from the COVID-19 pandemic, which led to a contraction of 0.3 percent in 2020.

image-4

Kenya’s Ruto vows to cut spending, borrowing in move ‘back to sanity’

<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/thumbnail_world-map-with-focus-federal-republic-nigeria-with-capital-city-abuja-820x615.jpg" alt="" class="wp-image-420179" width="648" height="486" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/thumbnail_world-map-with-focus-federal-republic-nigeria-with-capital-city-abuja-820x615.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/thumbnail_world-map-with-focus-federal-republic-nigeria-with-capital-city-abuja-300x225.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/thumbnail_world-map-with-focus-federal-republic-nigeria-with-capital-city-abuja-120x90.jpg 120w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/thumbnail_world-map-with-focus-federal-republic-nigeria-with-capital-city-abuja-768x576.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/thumbnail_world-map-with-focus-federal-republic-nigeria-with-capital-city-abuja.jpg 1280w" sizes="(max-width: 648px) 100vw, 648px" /><figcaption>Map of Nigeria Source: freepik.com</figcaption></figure>



Japan&#8217;s Daikin Industries Ltd&nbsp;6367.T&nbsp;will begin assembling air conditioners in Nigeria as it renews a push into Africa that had been delayed by the COVID-19 pandemic, a regional head said on Thursday.



&#8220;We are very soon going to have a factory in Nigeria,&#8221; Kanwal Jeet Jawa, the head of Daikin&#8217;s operations in India and East Africa, told Reuters.



Rather than building a plant, Daikin is using space in a facility provided by a local distributor in the West African nation, he said.



In East African countries, including Tanzania and Kenya, Daikin is aiming to become the leading seller of air conditioners, chillers and other cooling equipment by 2025.



The company is looking to replicate its success in India, where it has beaten the likes of South Korea&#8217;s LG Electronics Inc&nbsp;066570.KS&nbsp;to take top market share amid rapid market expansion driven by the country&#8217;s economic growth, Jawa said.



Daikin&#8217;s production capacity in India is set to almost double in 2023 with the opening of a new factory, allowing it to ship equipment to Africa that is more affordable and better suited to local conditions than air conditioners the Japanese company makes elsewhere, Jawa said.



&#8220;For East Africa, we will continue to supply finished products produced in India,&#8221; a Daikin spokesperson said.

thumbnail_world-map-with-focus-federal-republic-nigeria-with-capital-city-abuja

Japan’s Daikin to build air conditioners in Nigeria in renewed push

By Julia Payne



LONDON, Sept 29 (Reuters)&nbsp;&#8211;&nbsp;Nigeria has failed to capitalise on an oil price boom that has helped cushion other exporters from the impact of inflation, with millions more Nigerians now facing poverty.



Data from Nigeria&#8217;s state oil company NNPC shows that it did not contribute anything to state coffers in the first eight months of 2022, despite crude prices averaging $94 a barrel so far this year, a rise of 42% from last year.



At the heart of Nigeria&#8217;s problem is that despite being Africa&#8217;s biggest oil and gas producer, the country depends almost entirely on imports to cover its gasoline needs.



It then subsidises the cost to consumers, which has created a disparity between the price at the pump and what people pay to fill their tanks in neighbouring countries, such as Benin.



This has led to widespread smuggling, which has in turn driven up the amount of costly gasoline Nigeria imports and wiped out the gains that it should have made from crude exports because it ends up buying far more than it needs.



&#8220;Hundreds of thousands of people (in Benin) organize their survival around this traffic,&#8221; Boris Houenou, a Beninois economist said of the smuggling of Nigerian gasoline.



&#8220;A litre of Nigerian petrol worth $0.45 (per litre) can be passed to Benin for $0.70,&#8221; he added.



Estimates of the amount of gasoline smuggled abroad vary, with some independent researchers putting it at around 15 million litres a day, while NNPC&#8217;s own assessment is 42 million.



Nigerian National Petroleum Co (NNPC) said this month that gasoline smuggling was distorting supplies, adding that it was working to crack down on it.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N30633R&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



The NNPC&#8217;s federal account allocation (FAAC) shows it remitted just over $3 billion from oil and gas sales to Nigeria&#8217;s federal account in 2020, falling to about $1.4 billion in 2021 and dropping to zero in 2022.



Nigerian oil production has fallen to 1-1.2 million bpd from pre-pandemic levels of 1.8 million bpd after decades of under-investment in upstream assets, while pipeline theft is at its highest level in years, at an estimated at 200,000 barrels per day (bpd).&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL5N2WW3WT&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a><a href="https://www.reutersconnect.com/all?search=all%3AL1N30G0SQ&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



Gasoline imports, meanwhile, have ballooned to more than double Nigeria&#8217;s estimated needs this year, Reuters calculations based on the FAAC data indicate.



&#8220;We&#8217;ve moved from 30 million litres a day to 90 million during this administration without anything to show that consumption has actually increased,&#8221; said Cheta Nwanze, lead partner at Lagos-based risk consultancy SBM Intelligence.



NNPC recorded gasoline deliveries of 90 million litres a day in March and 83 million in April, Reuters calculations showed. In the same months last year, imports were 64 and 63 million litres respectively, well above national demand.



Nigeria&#8217;s reliance on imported oil products looks set to continue, two industry sources with knowledge of the matter said, with a new refinery near Lagos unlikely to come online until the end of 2023 and a revamp of the 210,000 barrel-per-day Port Harcourt facility expected to take several years.



NNPC and Nigeria&#8217;s finance ministry did not respond to multiple Reuters requests for comment.



&#8216;CURIOUS CASE&#8217;



Although the Nigerian government announced plans to remove the gasoline subsidy last year, it then backtracked in July, citing concerns over potential social unrest.



The World Bank estimates inflationary pressures will tip 7 million more Nigerians into poverty this year, bringing the total to 45% of the population of 200 million.



&#8220;Despite the better-than-expected performance of the services and agriculture sectors and higher oil prices &#8230; Nigeria is experiencing a curious case of lower fiscal revenues,&#8221; Marco Hernandez, World Bank Lead Economist for Nigeria, said in a June development Report.



&#8220;This is limiting the government&#8217;s ability to expand basic services, support the economic recovery, and protect the poor during this difficult time,&#8221; Hernandez added in the report.



Nigeria&#8217;s Finance Minister Zainab Ahmed has repeatedly warned about the high cost of gasoline subsidies, saying the bill could reach $16.2 billion in 2023.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N2UI5G7&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a><a href="https://www.reutersconnect.com/all?search=all%3AL1N2Z223X&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



And the World Bank estimated that foregone oil revenues would total 5 trillion naira ($12.04 billion) this year due to the subsidy, equivalent to 30% of Nigeria&#8217;s entire budget.



In 2020, NNPC retained 4% of oil and gas sales to cover gasoline subsidies. This rose to 45% last year and in 2022 it has reached 83% of sales.



The increasing fuel subsidy is taking away money from capital expenditure and is a &#8220;major drainer to overall government revenues and fiscal position,&#8221; Nigeria&#8217;s finance ministry said in its latest budget projection in August.



&#8220;The subsidy on Petroleum Motor Spirit (PMS) supply has had significant adverse impact on government revenues,&#8221; it added.



Nwanze of SBM Intelligence said: &#8220;The subsidy is a complete waste at this point, but it&#8217;s politically explosive.&#8221;



Nigeria holds presidential elections in February against a backdrop of price rises as a result of the Ukraine crisis and post-pandemic supply chain bottlenecks.



As well as the higher cost of gasoline purchases, a more costly swap contract has also come at a bad time.



Until the end of last year, NNPC covered domestic gasoline needs via Direct Sale Direct Purchase (DSDP) contracts.



Now NNPC is also buying ad hoc cargoes and through a Crude Oil Refining and Direct Partnership Agreement (CORDPA), which involves paying higher premiums and a trader waiting longer to receive its crude delivery as payment.



In May, for example, the DSDP premium was around $10 per tonne of gasoline, while the premium paid under a CORDPA was $22, according to NNPC&#8217;s spreadsheets. Rates vary seasonally and for most of the year these levels had been $35 to about $50 a tonne. NNPC paid up $80 and $100 for some ad hoc cargoes.



And although gasoline is subsidised, the amount ordinary Nigerians pay at the pump remains higher than the set price.



In its FAAC reports for 2021 and 2022, NNPC set its subsidised price at 124 naira ($0.30) per litre, but the average pump price is closer to 200 naira per litre across many states.



&#8220;We should be reaping a bumper harvest but alas we are not,&#8221; lamented one Nigerian official.

Africas Richest Man Builds Nigerias $15 Billion Oil Refinery

ANALYSIS- Nigeria squanders oil price bonanza as gasoline subsidies soar￼

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="728" height="485" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/GRWCSJKK3NKH7M3COMPN5L5GGU.jpg" alt="" class="wp-image-420130" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/GRWCSJKK3NKH7M3COMPN5L5GGU.jpg 728w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/GRWCSJKK3NKH7M3COMPN5L5GGU-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/GRWCSJKK3NKH7M3COMPN5L5GGU-135x90.jpg 135w" sizes="(max-width: 728px) 100vw, 728px" /><figcaption>The International Monetary Fund logo is seen at IMF headquarters in Washington, U.S., October 14, 2017. REUTERS/Yuri Gripas/File Photo</figcaption></figure>



ACCRA, Sept 28 (Reuters)&nbsp;&#8211;&nbsp;Ghana&#8217;s negotiations with the International Monetary Fund over a rescue package will be fast-tracked, the country&#8217;s Finance Minister Ken Ofori-Atta said on Wednesday.



Ghana began talks with the Fund on Monday&nbsp;for an IMF-supported lending programme in a bid to reduce economic hardship that spurred street protests.



&#8220;Negotiations will be fast-tracked to ensure the key aspects of the programme are reflected in the 2023 annual budget statement in November 2022,&#8221; Ofori-Atta said at a news briefing.



The IMF staff team is discussing policies and reforms with officials in Ghana after the West African country requested a loan from the Fund in July.



The IMF mission is scheduled to last until Oct. 7 and will include a full assessment of the sustainability of Ghana&#8217;s debt burden. If that debt is deemed unsustainable, the Fund will be unable to provide support without some sort of restructuring.



Reports that the government may be considering a plan to restructure it&#8217;s local currency debt gained steam last week, prompting credit ratings agency Fitch to downgrade Ghana to &#8220;CC&#8221; from &#8220;CCC&#8221;.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AFWN30U1AR&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



A Fitch senior director said domestic debt restructuring would be &#8220;highly unusual&#8221;, and warned it could spell disaster for local financial institutions. A brief from Oxford Economics on Monday said it would risk sending Ghana into a recession.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N30S47A&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



Ofori-Atta said on Wednesday that government had not come to any agreement with the Fund on the parameters of debt operations, but that a committee would be formed in the coming days to engage financial sector stakeholders on how to proceed.



&#8220;We welcome all contributions to this great public debate, but we must be careful to build and not to tear down our nation,&#8221; he said.



(Reporting by Bate Felix and Sofia Christensen; Writing by Sofia Christensen and Cooper Inveen; Editing by Estelle Shirbon and Jon Boyle)

FILE PHOTO: The International Monetary Fund logo is seen at IMF headquarters in Washington

Ghana negotiations with IMF to be fast-tracked : finance minister

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="549" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/2770193028_68edc662a9_b-820x549.jpg" alt="" class="wp-image-403037" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/2770193028_68edc662a9_b-820x549.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/2770193028_68edc662a9_b-300x201.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/2770193028_68edc662a9_b-768x514.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/2770193028_68edc662a9_b.jpg 1023w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>Photo: via Flickr</figcaption></figure>



KAMPALA, Sept 27 (Reuters)&nbsp;&#8211;&nbsp;Uganda will hold its third oil block licensing round next year, its energy minister said on Tuesday, as it seeks to develop its petroleum sector in a bid to expand its economy.



Uganda discovered crude oil reserves in the Albertine rift basin near the border with Democratic Republic of Congo in 2006 and has previously held two licensing rounds but a large portion of the basin remains unexplored.



Government geologists estimate the country&#8217;s confirmed reserves at 6.5 billion barrels of oil, of which 2.2 billion is recoverable.



&#8220;As part of the strategies to exploit the oil and gas resources in a sustainable manner the country is announcing the third licensing round in 2023,&#8221; Minister of Energy and Mineral Development Ruth Nankabirwa Ssentamu told an oil and gas conference in the capital Kampala.



In February TotalEnergies&nbsp;TTEF.PA&nbsp;and its partner China National Offshore Oil Corporation&nbsp;0883.HK&nbsp;signed a final investment decision (FID) with Uganda and Tanzania to kick-start investments worth more than $10 billion to produce and export Uganda&#8217;s crude.



Part of that investment will involve a $3.5 billion pipeline that will help ship landlocked Uganda&#8217;s crude to the world markets via a port on Tanzania&#8217;s Indian Ocean coast.



At the same conference, Uganda&#8217;s President Yoweri Museveni criticised the European Union parliament after it&nbsp;<a href="https://www.europarl.europa.eu/doceo/document/TA-9-2022-0321_EN.html" target="_blank" rel="noreferrer noopener">passed a resolution</a>&nbsp;this month urging TotalEnergies to delay development of the pipeline by a year to explore an alternative route or alternative renewable energy projects.



Museveni said the European Parliament&#8217;s move was &#8220;a wrong battleground for them. We don&#8217;t take kindly to arrogance.&#8221;



&#8220;So the plan will be implemented according to the schedule.&#8221;



&#8220;You&#8217;re lecturing me what to do in Uganda?,&#8221; he said. &#8220;Some of these people are insufferable.&#8221;



The EU resolution warns that the pipeline and associated infrastructure would displace about 100,000 people, jeopardise water resources and endanger protected marine areas in Tanzania.



Museveni had&nbsp;<a href="https://twitter.com/KagutaMuseveni/status/1570827102999687174" target="_blank" rel="noreferrer noopener">previously warned</a>&nbsp;TotalEnergies, that if it heeded the EU resolution, Uganda would find another partner to develop the project.



The EU did not immediately respond to a request for comment.



TotalEnergies said in a statement the company would ensure the project achieves &#8220;sustainable development including the environment and respect for human rights.&#8221;



(Reporting by Elias Biryabarema; Writing by George Obulutsa; Editing by James Macharia Chege and David Evans)

2770193028_68edc662a9_b

Uganda announces oil block licensing round, criticises EU over pipeline

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="728" height="489" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/27KAMOMRO5JWJP4KFLXAY5LKSI.jpg" alt="" class="wp-image-420101" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/27KAMOMRO5JWJP4KFLXAY5LKSI.jpg 728w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/27KAMOMRO5JWJP4KFLXAY5LKSI-300x202.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/27KAMOMRO5JWJP4KFLXAY5LKSI-134x90.jpg 134w" sizes="(max-width: 728px) 100vw, 728px" /><figcaption>Kenya&#8217;s former Central Bank Governor Njuguna Ndung&#8217;u speaks to Reuters during an interview at his office in Nairobi. File REUTERS/ Antony Njuguna</figcaption></figure>



NAIROBI, Sept 27 (Reuters)&nbsp;&#8211;&nbsp;Kenyan&nbsp;President William Ruto&nbsp;on Tuesday appointed&nbsp;former central bank governor Njuguna Ndung&#8217;u as finance minister&nbsp;to steer the economy through rising inflation, a heavy debt burden and drought.



Ndung&#8217;u,&nbsp;an economics professor,&nbsp;led the central bankbetween&nbsp;2007 and&nbsp;2015, winning praise for presiding over the expansion of the financial sector and condemnation for prioritising growth over price stability in 2011.



Ruto was sworn in this month after a hard fought electoral contest, in which he promised that he would create economic opportunities for the poor.



But he faces a very narrow fiscal space to implement his policies, after the government of predecessor Uhuru Kenyatta ramped up public borrowing to fund infrastructure projects.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N2Z644Z&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



The country is also facing its worst drought in 40 years as cattle farmers lose their herds.



&#8220;We appreciate that we have a difficult economic situation on our hands,&#8221; the president said as he unveiled his cabinet.



<h3 class="wp-block-heading" id="h-read-more-hustler-ruto-becomes-kenya-s-fifth-president-after-close-election">Read more: <a href="https://www.cnbcafrica.com/2022/william-ruto-to-be-sworn-in-as-kenyas-president/">“Hustler” Ruto becomes Kenya’s fifth president after close election</a></h3>



He urged parliament to swiftly approve his cabinet choices, so the government can start work on the economy.



Ruto also appointed a former vice president and deputy prime minister, Musalia Mudavadi, as his chief minister, a newly created post, to coordinate government business.



He appointed Alfred Mutua, a former government spokesman and county governor, as minister of foreign affairs, and lawmaker Aden Duale as his defence minister.



But all eyes will be focused on Ndung&#8217;u due to the state of the economy.



Ndung&#8217;u, who earned his doctorate from a Swedish university, weathered a political storm in 2012 as parliament tried to oust him over currency turmoil the previous year, when the shilling weakened sharply and inflation soared.



A Reuters poll ranked him as the worst performing African policymaker after the shilling plunged to its weakest-ever level while inflation soared.



He restored his reputation as a central banker in the following years, containing inflation after raising interest rates before gradually stabilising them.



The tenure of the current central bank governor, Patrick Njoroge, is set to end in June next year.



(Reporting by George Obulutsa and Duncan Miriri Editing by James Macharia Chege and Nick Macfie)

Kenya’s Central Bank Governor Njuguna Ndung’u speaks to Reuters during an interview at his office in Nairobi

Ex-central bank chief named Kenyan finance minister amid rising inflation

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/03/GettyImages-496939132-820x547.jpg" alt="" class="wp-image-399686" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/03/GettyImages-496939132-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/03/GettyImages-496939132-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/03/GettyImages-496939132-768x513.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/03/GettyImages-496939132-1536x1025.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2021/03/GettyImages-496939132-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>An Eskom sign stands outside the headquarters for Eskom Holdings SOC Ltd., South Africas state-owned electricity utility at Megawatt Park in Sandton, near Johannesburg, South Africa, on Wednesday, Nov. 11, 2015. A plan to reform state-owned power company Eskom Holdings SOC Ltd. and bring South Africa and its economy out of the dark is starting to show results, according to Chief Executive Officer Brian Molefe. Photographer: Waldo Swiegers/Bloomberg via Getty Images</figcaption></figure>



Sept 27 (Reuters)&nbsp;&#8211;&nbsp;The South African government will make changes to state power utility Eskom&#8217;s board of directors, the Department of Public Enterprises&nbsp;(DPE)&nbsp;said on Tuesday,&nbsp;after electricity outages reached record levels this year.



Saddled with unreliable coal-fired power stations and a mountain of debt, Eskom has struggled to meet electricity demand for more than a decade, constraining economic growth in Africa&#8217;s most industrialised nation.



&#8220;On Tuesday, the Minister (Pravin Gordhan) informed the board that a review has been finalised and that the Board will soon be reconstituted and restructured,&#8221; the department said in a statement.



The members of the board will be informed of the outcome of the process and the government will soon deliberate on the restructuring, it said.



Eskom did not immediately comment on the DPE statement.



It was not clear whether Eskom&#8217;s board would be entirely replaced or whether some board members would keep their positions in the planned shake-up.



It is currently headed by chairman Malegapuru William Makgoba, who took up the post in January 2020 after the previous chairman resigned after another period of major power cuts.



President Cyril Ramaphosa&#8217;s government has been trying to reform the struggling company to make it more efficient, but progress has been slow.



This year the most electricity has been shed from the national grid to date, fuelling public frustration and leading to calls for heads to roll.



(Reporting by Bhargav Acharya in Bengaluru; Editing by Alexander Winning)

Eskom Holdings SOC Ltd Chief Executive Officer Brian Molefe Interview

South Africa to overhaul power utility Eskom’s board amid record outages

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107098672-1659606797135-gettyimages-1239915338-UAE_ABU_DHABI-820x462.jpeg" alt="" class="wp-image-420086" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107098672-1659606797135-gettyimages-1239915338-UAE_ABU_DHABI-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107098672-1659606797135-gettyimages-1239915338-UAE_ABU_DHABI-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107098672-1659606797135-gettyimages-1239915338-UAE_ABU_DHABI-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107098672-1659606797135-gettyimages-1239915338-UAE_ABU_DHABI-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107098672-1659606797135-gettyimages-1239915338-UAE_ABU_DHABI.jpeg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>Photo: via CNBC</figcaption></figure>



DUBAI, Sept 22 (Reuters)&nbsp;&#8211;&nbsp;Abu Dhabi-based hospital operator Burjeel Holdings is seeking local investors for its planned initial public offering, two sources said, scrapping plans to seek foreign investors after Abu Dhabi&#8217;s International Holding Company (IHC) took a 15% stake this week.



Egypt-listed EFG-Hermes&nbsp;HRHO.CA&nbsp;and JPMorgan&nbsp;JPM.N&nbsp;are no longer involved in the deal, said the sources, declining to be named as the matter is not public.



The transaction was expected to be authorised for marketing to U.S. investors, but the company will instead focus on its domestic market.



Burjeel, which has a network of 39 hospitals and clinics across the Middle East and India, declined to comment when contacted by Reuters on Thursday. JPMorgan also declined to comment, while EFG-Hermes did not immediately respond to requests for comment.



IHC&nbsp;IHC.AD&nbsp;said on Monday in a regulatory disclosure that its acquisition of a stake in Burjeel would help diversify its healthcare investments both locally and regionally.



The company had previously planned to go public with a listing in London, but in 2019 was forced to reconsider because of uncertainty surrounding Britain&#8217;s departure from the European Union.



(Reporting by Hadeel Al Sayegh; editing by Jason Neely, Kirsten Donovan)

107098672-1659606797135-gettyimages-1239915338-UAE_ABU_DHABI

UAE healthcare firm Burjeel Holdings seeks local investors for IPO -sources

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/TD7QUJR4U5NX7IGFIXM2KWAA5A-820x547.jpg" alt="" class="wp-image-420069" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/TD7QUJR4U5NX7IGFIXM2KWAA5A-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/TD7QUJR4U5NX7IGFIXM2KWAA5A-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/TD7QUJR4U5NX7IGFIXM2KWAA5A-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/TD7QUJR4U5NX7IGFIXM2KWAA5A-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/TD7QUJR4U5NX7IGFIXM2KWAA5A-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/TD7QUJR4U5NX7IGFIXM2KWAA5A-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>FILE PHOTO: Electric wires are pictured in Ojuelegba district in Nigeria&#8217;s commercial capital Lagos, Nigeria June 18, 2018. REUTERS/Akintunde Akinleye/File Photo</figcaption></figure>



LAGOS, Sept 26 (Reuters)&nbsp;&#8211;&nbsp;Nigeria&#8217;s national electricity grid collapsed on Monday leaving many parts of the country without power, electricity distribution companies said.



The grid has collapsed at least four times this year, which authorities blame on technical problems. Last month workers from the Transmission Company of Nigeria (TCN) went on strike and temporarily shut the grid.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N2ZS4PD&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



Electricity distribution firms, known as Discos, said the outage happened earlier on Monday and they were working with TCN to restore supplies. They did not state the cause of the outage.



Nigeria has installed capacity of 12,500 megawatts but produces about a quarter of that, leaving many Nigerians and businesses reliant on diesel-powered generators. Diesel prices have soared since the start of the year.



The nation&#8217;s sclerotic power grid, and its precarious energy supply, are often cited by businesses as a key issue hindering growth in Africa&#8217;s most populous country.



(Reporting by MacDonald Dzirutwe; Editing by Toby Chopra)

FILE PHOTO: Electric wires are pictured in Ojuelegba district in Nigeria’s commercial capital Lagos

Nigeria suffers widespread blackouts after electricity grid fails

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="728" height="485" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/WRGTZ2ALJFPGVMLV76JYZWAXGI.jpg" alt="" class="wp-image-420065" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/WRGTZ2ALJFPGVMLV76JYZWAXGI.jpg 728w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/WRGTZ2ALJFPGVMLV76JYZWAXGI-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/WRGTZ2ALJFPGVMLV76JYZWAXGI-135x90.jpg 135w" sizes="(max-width: 728px) 100vw, 728px" /><figcaption>Nigerian naira notes are seen in this picture illustration March 15, 2016. REUTERS/Afolabi Sotunde/Illustration/File Photo</figcaption></figure>



JOHANNESBURG, Sept 26 (Reuters)&nbsp;&#8211;&nbsp;Nigeria and Kenya are likely to hike interest rates by a modest 50 basis points in the coming days after months of heavy lifting from other African central banks to try to calm rampant inflation, a Reuters poll found, while Ghana will hold fire.



This week&#8217;s benchmark interest rate decisions remain a very close call without any clear majority by analysts.



A scarcity of dollars is fuelling inflation in Ghana and Nigeria, as well as other parts of the continent like Ethiopia, and all are still licking their wounds from waves of rate increases in the United States that have siphoned away greenbacks and weakened domestic currencies.



&#8220;Tightening global financial conditions and continued dollar appreciation will set the tone for upcoming sub-Saharan Africa central bank decisions,&#8221; said Razia Khan at Standard Chartered, who expects action in both Nigeria and Kenya.



For Nigeria, a median of 10 analysts suggested rates would increase by 50 basis points (bps) to 14.5% on Tuesday. But while four respondents agreed with the median the rest were divided between no change and up to a 150 basis points lift.



The Central Bank of Kenya has been one of the least active in the continent in an&nbsp;election year&nbsp;that saw William Ruto sworn in as Kenya&#8217;s fifth president. Rates were expected to be hiked for a second time by 50 bps on Thursday, taking them to 8.0%.



But again, the outcome was a close call with the breakdown of 11 analysts showing five predicted no change, four saw a hike of 50 bps and two expected a 100 bps increase.



Like in South Africa, inflation has been high in Kenya although not as fast as in west Africa. South Africa increased its repo rate by 75 bps last week and similar hikes&nbsp;are expected&nbsp;in the next two quarters.



A median of nine analysts said rates would be held at 22.0% in Ghana. Five respondents said no change while the others expected a lift of between 100 and 300 bps.



The Bank of Ghana has hiked rates by 850 bps in the past year but that has not helped stop a slide in its currency which has been one of the worst performing emerging market currency, having lost over half its value this year.



&#8220;We expect inflation to peak in Q4, before starting to recede, while the cedi has started to move sideways in recent weeks,&#8221; said Pieter du Preez of Oxford Economics.



Consumer inflation in Ghana&nbsp;raced to&nbsp;33.9% in August, its highest since 2001 and in the same month as a&nbsp;300 basis point hike&nbsp;in interest rates to 22.0%, the largest lending rate increase in the country&#8217;s history.



Khan said given Ghana&#8217;s tightening was still feeding into the economy, &#8220;we no longer expect further imminent rate changes&#8221;.



Ghana&#8217;s central bank rescheduled its upcoming interest rate decision to Oct. 7 from Sept. 26 to coincide with the end of an International Monetary Fund mission to the country.



(Reporting by Vuyani Ndaba; Editing by Alison Williams)

FILE PHOTO: Nigerian naira notes are seen in this picture illustration

Modest rate hikes seen for Nigeria, Kenya; Ghana to hold

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/oil.jpeg" alt="" class="wp-image-413529" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/oil.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/oil-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/oil-160x90.jpeg 160w" sizes="(max-width: 740px) 100vw, 740px" /></figure>



HARARE, Sept 26 (Reuters)&nbsp;&#8211;&nbsp;Australian-listed Invictus Energy Ltd&nbsp;IVZ.AX&nbsp;has started drilling one of two exploration wells for oil and gas in the northern part of Zimbabwe, the company said on Monday.



The 3.5 kilometre (2.17 miles) deep well, situated in the Muzarabani-Mbire area, is part of the Cabora Bassa project in Zimbabwe, which is 80% owned and operated by Invictus through its interest in Geo Associates.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL4N2ZV2CZ&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



Invictus said in a statement that the drilling of the first well, Mukuyu-1, began on Friday and will last between 50 and 60 days.



Mukuyu, which will cost $16 million, is one of the largest oil and gas exploration prospects to be drilled globally in 2022, estimated at 20 trillion cubic feet and 845 million barrels of conventional gas condensate, or about 4.3 billion barrels of oil equivalent, the company said.



Invictus has been prospecting for oil and gas deposits for the past four years in the Cabora Bassa and Zambezi basins.



The company said that Mukuyu-1 will be followed by the 1.5 km deep well, Baobab-1, which will be completed in 30-40 days.



Last month, the company raised additional $17 million to fund the drilling of the exploration wells through private placement.



(Reporting by Nyasha Chingono in Harare; Editing by Anait Miridzhanian and Louise Heavens)

Invictus Energy starts drilling first exploration well in Zimbabwe

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="728" height="485" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/5K52FDSDWFNOJEMWHZY6GIWIVY.jpg" alt="" class="wp-image-420053" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/5K52FDSDWFNOJEMWHZY6GIWIVY.jpg 728w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/5K52FDSDWFNOJEMWHZY6GIWIVY-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/5K52FDSDWFNOJEMWHZY6GIWIVY-135x90.jpg 135w" sizes="(max-width: 728px) 100vw, 728px" /><figcaption>The International Monetary Fund logo is seen at IMF headquarters in Washington, U.S., October 14, 2017. REUTERS/Yuri Gripas/File Photo</figcaption></figure>



Sept 25 (Reuters)&nbsp;&#8211;&nbsp;The International Monetary Fund confirmed on Sunday that a staff team will visit Ghana this week to continue discussions with the authorities on policies and reforms that could be supported by an IMF lending arrangement.



Ghana turned to the&nbsp;IMF for help in July&nbsp;as its balance-of-payments deteriorated and hundreds took to the streets to protest against economic hardship. An IMF staff team briefly visited the country two weeks later.



Reuters&#8217; reported last week that an IMF team would&nbsp;visit Ghana this week. The IMF, in a statement on Sunday, said the team would arrive on Monday and stay until Oct. 7.



The government of Ghana, a major gold and cocoa producer, has been struggling to tame galloping inflation, reduce public debt and shore up the local currency. Its balance-of-payments deficit swelled to nearly $2.5 billion by the end of June from around $935 million in March.



A source with knowledge of the matter told Reuters last month that an eventual agreement between Ghana and the IMF will likely consist of $3 billion in financing over a three-year period, and contain elements of both Extended Credit Facility (ECF) and Extended Fund Facility (EFF) programmes.



(Reporting by Jaiveer Singh Shekhawat in Bengaluru; Editing by Susan Fenton)

IMF team heads to Ghana today to discuss loan programme request

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/ASECNA_sign_at_Bissau_airport_2-820x461.jpg" alt="" class="wp-image-420035" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/ASECNA_sign_at_Bissau_airport_2-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/ASECNA_sign_at_Bissau_airport_2-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/ASECNA_sign_at_Bissau_airport_2-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/ASECNA_sign_at_Bissau_airport_2-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/ASECNA_sign_at_Bissau_airport_2-1536x864.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/ASECNA_sign_at_Bissau_airport_2-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>ASECNA sign at Bissau Airport, Bissau, Guinea-Bissau Photo: via Wikipedia </figcaption></figure>



DAKAR, Sept 23 (Reuters)&nbsp;&#8211;&nbsp;Some members of an African regional air safety union have begun a strike over working conditions and pay, the agency they work for said on Friday, despite court decisions and government bans barring them from doing so.



The 18-member West Africa and Madagascar aviation safety agency (ASECNA), which manages air traffic control in an area covering 16.1 million square kilometres of airspace, said on Thursday that some staff had threatened a 48-hour strike that could impact flights.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N30T58J&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



&#8220;In spite of the prohibition of the strike by all the courts, and in spite of the orders of requisition of the air traffic controllers &#8230; the Union of Air Traffic Controllers&#8217; Unions (USYCAA) has launched a wildcat strike,&#8221; ASECNA said.



The agency did not say in its statement on Friday whether the strike would impact services, but told customers to check Notices to Airmen (NOTAMs) posts on airline websites.



The USYCAA union said in a statement that its members would cease providing services to all but &#8220;sensitive&#8221; flights for an indefinite period until their demands are satisfied.



(Reporting by Bate Felix and Diadie Ba; Writing by Cooper Inveen; Editing by Alexander Smith)

ASECNA_sign_at_Bissau_airport_2

African air safety union defies ban with strike action

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/06/GettyImages-1237649604-820x547.jpg" alt="" class="wp-image-417697" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/06/GettyImages-1237649604-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/GettyImages-1237649604-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/GettyImages-1237649604-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/GettyImages-1237649604-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/GettyImages-1237649604-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/GettyImages-1237649604-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>The seal for the International Monetary Fund is seen near the World Bank headquarters (R) in Washington, DC on January 10, 2022. (Photo by Stefani Reynolds / AFP) (Photo by STEFANI REYNOLDS/AFP via Getty Images)</figcaption></figure>



ACCRA, Sept 22 (Reuters)&nbsp;&#8211;&nbsp;Ghana&#8217;s central bank said on Thursday it has rescheduled its upcoming interest rate decision to Oct. 7 from Sept. 26, to coincide with the end of an IMF mission to the country.



Once considered the rising star of West African economies, the gold- and cocoa-producing nation is battling its worst economic crisis in years, as authorities struggle to slow mounting inflation, curb spending and revalue the currency.



The central bank raised its main lending rate by 300 basis points to 22% last month at an emergency meeting to address inflation, running above 30%, and other economic problems.



Ghana formally requested assistance from the International Monetary Fund in July, and a team is expected to arrive in the country early next week.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N30R4PX&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



The bank&#8217;s Monetary Policy Committee hopes that rescheduling the rate decision will &#8220;allow the decision&#8230; to benefit from the broader discussions to be held during that period,&#8221; the bank said in a statement.



Sources have previously said that the IMF&#8217;s next visit would likely coincide with the beginning of a Debt Sustainability Assessment.



A senior director from credit ratings agency Fitch on Wednesday warned that a sovereign default is &#8220;a real possibility&#8221; for Ghana, and any kind of domestic debt restructuring would likely threaten several local banks with insolvency.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N30S47A&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



(Reporting by Cooper Inveen; Editing by Bate Felix and Susan Fenton)

US-ECONOMY-FINANCE-IMF-WORLD BANK

Ghana reschedules interest rate decision to coincide with end of IMF mission

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/03/Lesetja_Kganyago_WEF-820x547.jpg" alt="" class="wp-image-400177" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/03/Lesetja_Kganyago_WEF-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/03/Lesetja_Kganyago_WEF-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/03/Lesetja_Kganyago_WEF-768x513.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/03/Lesetja_Kganyago_WEF.jpg 830w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>Lesetja Kganyago, governor of South Africa&#8217;s central bank (SARB), poses for a photograph following a Bloomberg Television interview on the opening day of the 28th World Economic Forum (WEF) on Africa in Cape Town, South Africa, on Wednesday, Sept. 4, 2019. The World Economic Forum on Africa meeting runs from 4-6 September. Photographer: Waldo Swiegers/Bloomberg</figcaption></figure>



JOHANNESBURG, Sept 22 (Reuters) – South Africa’s central bank raised its main lending rate by 75 basis points to 6.25% on Thursday, in a bid to rein in inflation that hiked it nearer to the level seen before the COVID pandemic.



The move was as expected by the majority of economists polled by Reuters and saw the rand pare gains against the U.S. dollar.



The South African Reserve Bank (SARB) has now raised rates for the sixth straight time in a row. The increases have added a total of 275 basis points (bps) since it began tightening policy in November 2021.



The five-member Monetary Policy Committee (MPC) was split 3-2 in its decision, with three members preferring a 75 bps increase and two wanting a 100 bps hike.



“The level of the repurchase rate is now closer to the level prevailing before the start of the pandemic,” SARB Governor Lesetja Kganyago told a news conference.



<h3 class="wp-block-heading" id="h-read-more-south-african-central-bank-governor-s-comments-on-rate-decision">Read more: <a href="https://www.cnbcafrica.com/2022/south-african-central-bank-governors-comments-on-rate-decision/">South African Central Bank Governor’s comments on rate decision</a></h3>



“The revised repurchase rate path remains supportive of credit demand in the near term, while raising rates to levels more consistent with the current view of inflation risks.”



Data on Wednesday showed August consumer inflation dipped to 7.6% year on year from 7.8% in July on the back of lower fuel prices, but analysts said at the time they did not think that would deter the bank from further rate hikes.



The SARB targets inflation of between 3% and 6%.



The sees consumer inflation averaging 6.5% in 2022 and 5.3% in 2023, compared to 6.5% and 5.7% previously.



It now forecasts the economy will grow 1.9% this year and 1.4% next year, similar predictions to the 2.0% and 1.3% forecasts at its last MPC meeting in July. 



(Reporting by Alexander Winning, Kopano Gumbi and Anait Miridzhanian Editing by James Macharia Chege)

Opening Day Of The 28th World Economic Forum on Africa

South African repo rate up by 75 BPS, now near pre-pandemic level

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2020/04/GettyImages-925900416-820x547.jpg" alt="" class="wp-image-367545" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2020/04/GettyImages-925900416-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2020/04/GettyImages-925900416-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2020/04/GettyImages-925900416-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2020/04/GettyImages-925900416-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2020/04/GettyImages-925900416-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2020/04/GettyImages-925900416-1110x740.jpg 1110w, https://cms.cnbcafrica.com/wp-content/uploads/2020/04/GettyImages-925900416-696x464.jpg 696w, https://cms.cnbcafrica.com/wp-content/uploads/2020/04/GettyImages-925900416-1068x712.jpg 1068w, https://cms.cnbcafrica.com/wp-content/uploads/2020/04/GettyImages-925900416-1920x1280.jpg 1920w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>Lesetja Kganyago, governor of South Africa&#8217;s reserve bank, gestures while speaking during a Bloomberg Television interview in London, U.K., on Thursday, March 1, 2018. South Africa&#8217;s new political leadership under President Cyril Ramaphosa sets a solid and credible policy trajectory, Kganyago said during the interview. Photographer: Luke MacGregor/Bloomberg via Getty Images</figcaption></figure>



JOHANNESBURG, Sept 22 (Reuters) – Below are some quotes from South African Reserve Bank Governor Lesetja Kganyago as he announced the central bank’s latest interest rate decision on Thursday.



<h2 class="wp-block-heading" id="h-inflation">INFLATION</h2>



While economic growth is slowing globally, inflation continues to surprise to the upside. Sustained policy accommodation, supply shortages and other restrictions have sharply increased the prices of many goods, services and commodities.



Producer price increases continue to pass-through to wages and consumer prices globally. Our estimate for inflation in the G3 is revised higher to 7.0% in 2022 (from 6.9%), up to 3.5% in 2023 (from 3.0%), and slightly higher at 2.1% in 2024.



Despite reduced global food price inflation, local food price inflation is revised up and is now expected to be 8.1% in 2022 (up from 7.4%). Food price inflation is revised lower to 5.6% (down from 6.2%) in 2023 and remains unchanged at 4.2% in 2024.



The Bankâ€™s forecast of headline inflation for this year is unchanged at 6.5%. For 2023, headline inflation is revised lower to 5.3% (down from 5.7%), as a result of lower food, fuel and core inflation forecasts for next year.



Headline inflation of 4.6% is expected in 2024 (down from 4.7%).



Our forecast for core inflation is unchanged at 4.3% in 2022, and lower than previously expected at 5.4% (down from 5.6%) in 2023. The forecast for 2024 is also slightly lower at 4.8% (from 4.9%). Services price inflation is broadly unchanged.



Core goods price inflation however is forecast lower in each year, largely due to a lower starting point for vehicles and non-alcoholic beverages inflation.



The risks to the inflation outlook are assessed to the upside. While global producer price and food inflation has eased, Russiaâ€™s war in the Ukraine continues, with adverse effects on global prices.



Average surveyed expectations of future inflation have increased to 6.5% for 2022 and 5.9% for 2023.



<h2 class="wp-block-heading">ECONOMIC GROWTH</h2>



This year the South African Reserve Bank expects the South African economy to grow by 1.9%, (from 2.0%).



Growth in the first quarter of this year surprised to the upside, at 1.7%. In the second quarter, flooding in Kwa-Zulu Natal and more extensive load-shedding contributed to a contraction of 0.7%.



Growth in the third and fourth quarters is forecast to be 0.4 and 0.3%, respectively.



The economy is forecast to expand by 1.4% in 2023 and by 1.7% in 2024, above previous projections.



With a low rate of potential, our current growth forecast leaves the output gap broadly unchanged. The output gap is still expected to turn positive in the second quarter of 2023.



<h2 class="wp-block-heading">DECISION</h2>



Against this backdrop, the MPC decided to increase the repurchase rate by 75 basis points to 6.25% per year, with effect from the 23 rd of September 2022.



Three members of the Committee preferred the announced increase. Two members preferred a 100 basis points increase.



The level of the repurchase rate is now closer to the level prevailing before the start of the pandemic.



The revised repurchase rate path remains supportive of credit demand in the near term, while raising rates to levels more consistent with the current view of inflation risks.



The aim of policy is to anchor inflation expectations more firmly around the mid-point of the target band and to increase confidence of hitting the inflation target in 2024.



Guiding inflation back towards the mid-point of the target band can reduce the economic costs of high inflation and enable lower interest rates in the future. 



(Compiled by James Macharia Chege)

Reuters

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ANALYSIS- Nigeria squanders oil price bonanza as gasoline subsidies soar

Ghana negotiations with IMF to be fast-tracked : finance minister

Uganda announces oil block licensing round, criticises EU over pipeline

Ex-central bank chief named Kenyan finance minister amid rising inflation

South Africa to overhaul power utility Eskom’s board amid record outages

UAE healthcare firm Burjeel Holdings seeks local investors for IPO -sources

Nigeria suffers widespread blackouts after electricity grid fails

Modest rate hikes seen for Nigeria, Kenya; Ghana to hold

Invictus Energy starts drilling first exploration well in Zimbabwe

IMF team heads to Ghana today to discuss loan programme request

African air safety union defies ban with strike action

Ghana reschedules interest rate decision to coincide with end of IMF mission

South African repo rate up by 75 BPS, now near pre-pandemic level

South African Central Bank Governor’s comments on rate decision

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Reuters

World Bank approves $750 mln credit to boost Nigerian reforms

Kenya’s Ruto vows to cut spending, borrowing in move ‘back to sanity’

Japan’s Daikin to build air conditioners in Nigeria in renewed push

ANALYSIS- Nigeria squanders oil price bonanza as gasoline subsidies soar￼

Ghana negotiations with IMF to be fast-tracked : finance minister

Uganda announces oil block licensing round, criticises EU over pipeline

Ex-central bank chief named Kenyan finance minister amid rising inflation

South Africa to overhaul power utility Eskom’s board amid record outages

UAE healthcare firm Burjeel Holdings seeks local investors for IPO -sources

Nigeria suffers widespread blackouts after electricity grid fails

Modest rate hikes seen for Nigeria, Kenya; Ghana to hold

Invictus Energy starts drilling first exploration well in Zimbabwe

IMF team heads to Ghana today to discuss loan programme request

African air safety union defies ban with strike action

Ghana reschedules interest rate decision to coincide with end of IMF mission

South African repo rate up by 75 BPS, now near pre-pandemic level

South African Central Bank Governor’s comments on rate decision

News Tips

Advertise With Us

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ANALYSIS- Nigeria squanders oil price bonanza as gasoline subsidies soar