Frontier Africa Reports
Frontier Opening Bell

Frontier Opening Bell - Tuesday, Feb. 4, 2025

by FRONTIER AFRICA REPORTS

Key Highlights from Global & African Markets

Markets React to Trump's Tariff Negotiations

  • Global markets remained volatile following Trump’s tariffs on Canada, China, Mexico, and South Africa.
  • Mexico and Canada negotiated a one-month suspension of the 25% tariff after discussions with President Trump.
  • Wall Street pulled back late Monday, influencing global and African markets.
  • South African JSE fell 0.5%, while Nigeria’s stock market rose by 0.13%, supported by strong bank earnings from UBA, FBN Holdings, and Access Bank.

African Market Overview

Stock Market Performance

  • Nigeria’s Stock Market: Up 0.13%, driven by strong earnings from major banks and agricultural companies.
  • South Africa’s JSE: Down 0.5%, reacting to Trump’s tariffs and local economic concerns.
  • Kenya Power PLC: Announced a cash dividend for the first time in 9 years, boosting its stock.

Key Economic & Political Developments Across Africa

East & Central Africa

  • Crisis in the Democratic Republic of Congo (DRC):

    • South Africa and East African leaders are holding a summit to address the M23 rebel conflict in Goma.
    • Over 80 cargo trucks headed to Goma are stranded at the Uganda border due to instability.
    • M23 rebels have ordered refugees to return home, but thousands remain hesitant due to safety concerns.

  • Tanzania’s Tourism Growth:

    • Tanzania welcomed 5 million tourists in 2024, marking strong post-pandemic recovery.

  • East African Breweries Ltd (EABL):

    • Reported a profit increase for the first time in 3 years.
    • Cross-listed in Tanzania and Uganda, further solidifying its regional presence.

West Africa

  • Nigeria’s Oil Production Target:

    • Nigeria aims to produce 2.7 million barrels per day by 2027, according to HA Energy’s CEO.
    • OPEC’s Joint Ministerial Monitoring Committee (JMMC) reaffirmed previous production agreements.

  • Debt & Bond Markets:

    • Nigeria’s Debt Management Office opened February's savings bond subscription.

  • Agricultural Sector Boom:

    • Presco and Okomu Oil PLC stocks rallied strongly on the Nigerian Exchange following strong full-year 2024 earnings.

  • Ghana’s Inflation Drops:

    • Ghana’s January inflation slowed to 23.5% YoY, a positive sign for the economy.
    • Bank of Ghana’s next monetary policy decision will reflect this new inflation data.

  • African Development Bank (AfDB) Proposes New Unit of Account:

    • AfDB is proposing an African Unit of Account (AUA), backed by critical minerals like cobalt and lithium.
    • This aims to create an alternative financial structure similar to the IMF's Special Drawing Rights (SDR).

  • Guinea’s Iron Ore Project:

    • The multi-billion-dollar Simandou Iron Ore Project is set to receive a $6 billion investment from China’s Baowu Steel Group.

Southern Africa

  • Trump Cuts Funding to South Africa:

    • Trump’s administration announced funding cuts to South Africa, citing allegations over land expropriation policies.
    • President Cyril Ramaphosa denied these claims, stating that land policies remain fair and inclusive.

  • Manufacturing & Trade Data:

    • South African manufacturing showed signs of recovery, despite trade disruptions in Mozambique due to post-election disputes.

  • Botswana’s Diamond Negotiations:

    • Botswana is finalizing a deal with De Beers to secure a larger share of its diamond revenues.

  • Vodacom Earnings Surge:

    • Vodacom’s earnings jumped 6%, driving its share price up on the JSE.
    • Growth was driven by strong performance in Africa and the UK.

  • Zimbabwe’s Econet in Talks to Sell Stake:

    • Zimbabwe’s Econet is in prolonged discussions to sell 51.5% equity to South Africa’s Naspers, though no final deal has been reached.

North Africa

  • Morocco’s Unemployment Rises:

    • Unemployment increased to 13.3% in 2024, influencing upcoming interest rate decisions by Bank Al-Maghrib.

  • Egypt-Somalia Agricultural Partnership:

    • Egypt and Somalia are exploring agricultural partnerships to strengthen food security and trade.

  • Meta AI Expands to MENA:

    • Meta officially launched AI operations in the Middle East and North Africa (MENA).

  • Egypt & Ukraine Strengthen Food Security Cooperation:

    • Egypt is discussing new food security agreements with Ukraine, a major global wheat supplier.

Conclusion

  • Trump’s tariff policies continue to shape global markets, but negotiations with Canada and Mexico signal possible relief.
  • Nigeria’s stock market remains resilient, buoyed by strong earnings in banking and agriculture.
  • The DRC conflict poses major trade disruptions, impacting Uganda, Kenya, and South Africa.
  • African economies are exploring regional financial independence, with the AfDB pushing for an African Unit of Account.
  • Egypt and Morocco face key economic challenges, while Meta AI’s expansion signals growing tech interest in MENA.

Host: BOASON OMOFAYE | Tuesday, February 4, 2025
"Hope you have a profitable day!"