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We bring you insights that matter to the African Economy 🌍📰

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Disputes between the ANC and DA over a proposed VAT hike have led to legal challenges, with a court hearing set for Tuesday. Meanwhile, the yield on South Africa’s 2030 government bond rose to 9.215%, signaling continued investor caution.

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The South African rand strengthened by 0.3% to 18.70 per dollar ahead of key economic data, including the Reserve Bank’s business cycle indicator. Despite the gain, the currency remains vulnerable due to political tensions within the ruling coalition.

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Traders attributed this stability to a balance between foreign exchange supply and demand. The quiet market conditions were partly due to the closure of financial markets on Friday and Monday for public holidays.

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As of Tuesday, April 22, 2025, the Kenyan shilling remained broadly stable against the U.S. dollar amid subdued trading activity. Commercial banks quoted the shilling at 129.40/90 per dollar at 0858 GMT, slightly appreciating from Thursday’s close of 129.45/95.

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However, IOCs argue that the funds are meant for future environmental cleanup and shouldn’t count as usable reserves. Disputes over timing and estimates, along with project delays, have undermined the plan, raising concerns over compliance and future investments.

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Central Africa’s plan to repatriate $5–10 billion in environmental funds from international oil companies has fallen short, with less than $500 million expected by the April 30, 2025 deadline. The initiative, led by the Bank of Central African States, aimed to boost regional FX.

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In Angola, Standard Bank plans to acquire an additional 24% stake in its subsidiary, following the government’s decision to sell shares through an IPO. In Nigeria, it seeks to expand its 67.55% holding in Stanbic IBTC, reinforcing its commitment to sustainable development.

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Standard Bank is enhancing its role in Africa’s energy transition by increasing stakes in its Nigerian and Angolan operations. The bank aims to capitalize on growth opportunities arising from energy projects across the continent.

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Conversely, autonomous inflows increased to $7.31 billion, up from $6.08 billion in December. Aggregate inflows and outflows both declined, with outflows dropping to $4.84 billion from $5.17 billion.

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Nigeria’s net foreign exchange inflow declined to $4.79 billion in January 2025, a 4.49% drop from December 2024’s $5.01 billion, according to the Central Bank of Nigeria (CBN). This decrease was primarily due to reduced inflows through the CBN.

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The firm cited internal disagreements and significant business losses after global executives pressured local partners to drop high-risk clients. This move is part of PwC’s broader effort to mitigate financial and reputational risks amid increasing regulatory scrutiny.

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PwC has closed its operations in nine Sub-Saharan African countries including Ivory Coast, Gabon, Cameroon, Madagascar, Senegal, the Democratic Republic of Congo, Republic of Congo, Republic of Guinea, and Equatorial Guinea after a strategic review.

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The International Monetary Fund (IMF) has reached a staff-level agreement with Tanzanian authorities, which, upon approval by the IMF’s executive board, will provide Tanzania with approximately $441 million in financing.

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The central bank cited favorable base effects, previous monetary tightening, and diminishing impacts of earlier economic shocks as reasons for the decrease. It anticipates continued, albeit slower, inflation reduction into 2025 and 2026, supported by fiscal consolidation measure.

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Egypt’s central bank reduced its overnight interest rates by 225 basis points, lowering the lending rate to 26% and the deposit rate to 25%. This marks the first rate cut since 2020, due to a significant decline in inflation from a peak of 38% in Q4 2023 to 13.6% in Q1 2025.

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Senegal’s end‑2023 debt was restated at 99.7 % of GDP versus 74.4 % previously disclosed. The IMF board will only resume financing once final audited figures are available and the government commits to reforms while managing repayments and local bond issuance.

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The IMF has delayed its decision on Senegal’s waiver for the suspended $1.8 billion bailout until May and expects replacement programme talks to start in June or July after authorities revealed under‑reported debt.

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Despite progress, the power sector still faces major issues like grid failures and gas shortages. With only a third of 13,000 MW generated, the government plans partial debt repayment to avoid shutdowns.

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Nigeria cut electricity subsidies by 35% after raising tariffs for high-use consumers, aiming to ease fiscal pressure. The tariff hike, targeting 15% of users, increased market revenue by 700 billion naira and reduced the government’s tariff from 3 trillion to 1.9 trillion naira.

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The pact is part of a broader effort to strengthen ties under the Nigeria–South Africa Bi-National Commission. It focuses on capacity building, technology transfer, and boosting investment to grow Nigeria’s underdeveloped mining sector and promote intra-African trade.

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Nigeria and South Africa signed a mining cooperation deal to help Nigeria diversify its oil-dependent economy. The agreement includes joint geological mapping, drone use, and exploration of key minerals like gold and lithium.