Kenya's Shilling Hits Historic Low; Nigeria Plans New Forex Laws; Ghana's Debt Declines; Ethiopia's Export Concerns; Morocco's Dirham Stable

Oil prices slipped on Monday, with Brent falling toward $80 a barrel, as investors awaited the OPEC+ meeting later this week for an agreement to curb supplies into 2024. Brent crude futures fell 39 cents, or 0.5%, to $80.19 a barrel by 0728 GMT, while U.S. West Texas Intermediate crude futures were at $75.10 a barrel, down 44 cents, or 0.6%.

KENYA: Shilling Overvalued, CBK Admits

Kenya's central bank governor, Kamau Thugge, revealed the shilling's historic low at 150 to the dollar, down 24% YoY, citing prolonged overvaluation. Five years ago, the IMF and World Bank estimated the shilling to be 20-25% overvalued. Thugge acknowledged artificially maintaining a strong exchange rate, depleting reserves covering less than four months' imports. The weakening shilling, influenced by a robust US currency and exacerbated by President Ruto's tax measures, contributes to a substantial debt burden, reaching over 10,100 billion shillings. Economic challenges persist despite Ruto's revenue-focused policies and a slowed growth rate of 4.8% in 2022.

NIGERIA: Central Bank of Nigeria to Introduce New Forex Laws, Fintech Regulations

In a keynote speech at the 2023 Annual Bankers Dinner, the Governor of the Central Bank of Nigeria, Mr. Yemi Cardoso, announced forthcoming measures to address naira depreciation and achieve exchange rate stability. The CBN plans to introduce new foreign exchange laws and guidelines, along with a banking recapitalization exercise to align with the vision of a $1 trillion economy. Cardoso also revealed plans for a new licensing framework for fintechs and payment banks, warning of sanctions for those operating beyond their licenses. To combat rising inflation, the CBN will tighten money supply over the next two quarters, conducting liquidity mop-ups through Open Market Operations.

GHANA: Ghana's Public Debt Declines to ￠567.3 Billion in September 2023

Ghana's public debt decreased by ￠14.2 billion between June and September 2023, reaching ￠567.3 billion ($51.0 billion), according to data from the Bank of Ghana. This reduction, equivalent to 66.4% of GDP, was influenced by slight gains in the cedi and the temporary halt in international market borrowings. The external component of the public debt stood at $29.4 billion in September, while the domestic debt decreased to ￠240.6 billion, constituting 28.1% of GDP. The report did not include data on the financial sector resolution debt and other liabilities such as the energy sector debt.

ETHIOPIA: Poor Exports Raise Concerns Over Fiscal Targets

A recent report from the Ministry of Trade and Regional Integration highlights a bleak start to the fiscal year, with exports totaling USD 820 million, falling significantly short of the anticipated USD 1.37 billion. This more than 40 percent shortfall signals a major setback from the record earnings of 2022. Agricultural commodities dominated, comprising 80 percent of revenues, while the mining sector lagged behind with a mere 10 percent of expected revenues. Challenges such as contraband trade, security issues, and currency shortages are cited as contributors to the underperformance, raising doubts about meeting the ambitious USD 5.1 billion revenue target by July.

MOROCCO: Moroccan Dirham Shows Marginal Movements Against Major Currencies

Morocco's central bank, Bank Al-Maghrib, reported a 0.16% gain for the Moroccan dirham against the US dollar and a 0.26% decline against the euro from November 16-22. Notably, no foreign exchange market auctions were conducted during this period. Official reserve assets rose to over MAD 354 billion ($35 billion) by November 17, showing a 3.7% yearly increase. Bank Al-Maghrib's interventions averaged MAD 109.5 billion ($10.8 billion), including loans, repurchase agreements, and seven-day advances. The interbank market saw a daily trading volume of MAD 2 billion ($198 million) with an average rate of 3%. The Moroccan stock index rose by 0.9%, contributing to a 11.9% year-to-date performance.