2 November 2023

Market Commentary

Oil gained 1% on Thursday to snap its three-day decline, as risk appetite returned to financial markets after the U.S. Federal Reserve kept benchmark interest rates on hold. Brent crude futures rose 82 cents, or 1%, to $85.45 a barrel by 0657 GMT, while U.S. West Texas Intermediate crude futures advanced 83 cents, also 1%, to $81.27 a barrel.

KENYA: Kenya’s Inflation Edges Up to 6.9% Amid Rising Food Prices
Kenya’s inflation rose for the second consecutive month to 6.9% in October, with food, energy, and transport costs being major contributors. The increase was driven by higher prices for items like potatoes, tomatoes, and oranges, while some foodstuffs saw price decreases. Additionally, housing, water, electricity, and transport costs all played a role in the uptick in inflation, as prices for gas, electricity, petrol, and diesel increased. Rising food prices continue to strain household budgets, impacting the cost of living for Kenyans.

NIGERIA: Nigerian Forex Market Sees 23.8% MoM Surge in October 2023 Turnover
Despite recent Forex market volatility, NAFEM turnover increased to $2.23 billion. FMDQ data shows weekly fluctuations, but Naira lost value. In the parallel market, it depreciated by N170, widening the gap with the official rate. Prudent reserve management is crucial for economic stability. CBN reports a slight reserve increase to $33.37 billion. Meanwhile, Naira stabilized at N1,170 in the parallel market but appreciated to N786.02 in NAFEM.

GHANA: Fitch Ratings Upgrades Ghana’s Local-Currency IDR to ‘CCC’
After successful domestic debt exchanges, Fitch has raised Ghana’s Long-Term Local-Currency Issuer Default Rating (IDR) from ‘RD’ to ‘CCC’. This move normalizes relations with most local-currency creditors, resulting in a substantial debt service reduction of GHS52 billion in 2023. Fitch cites these changes as a significant improvement in Ghana’s fiscal outlook.

EGYPT: Egypt’s External Debt at $164.73 Billion in Q4 FY2022/2023
Egypt’s external debt slightly decreased to $164.73 billion in the fourth quarter of the fiscal year 2022/2023, with $83.43 billion (50.65%) attributed to the government. The debt-to-GDP ratio stood at 40.3%. Egypt faces significant external debt service payments in the coming years, with a focus on increasing annual US dollar revenues and navigating an ongoing IMF loan agreement review.

ANGOLA: Angola Aims for 69% Debt-to-GDP Ratio by 2024
Angola’s Secretary of State for Finance and Treasury, Ottoniel dos Santos, has expressed the government’s goal of reducing the public debt to Gross Domestic Product (GDP) ratio to around 69% by 2024, down from the current approximately 85%. The government is working on measures to achieve this target, considering economic conditions, including oil prices, production, and international interest rates. Reducing public debt as a proportion of GDP has been a result of economic growth and fiscal surpluses. Dos Santos emphasized the need for prudent financial management to ensure essential expenditures while cutting costs optimally

by fixed income research team