Economy
East African Economies to Maintain Growth on Rising Commodity Prices
By Dipo Olowookere
Ongoing improvement in East Africa’s economic prospects is forecast by Ecobank’s research team in the newly published East Africa section of its flagship financial website, AfricaFICC (https://Ecobank.com/AfricaFICC).
Ethiopia, Kenya, Tanzania and Uganda are the regions’ economic powerhouses and are enjoying a period of significant economic growth – their Gross Domestic Products are forecast to grow by between 5.2 percent and 8.5 percent this year – supported by ongoing reforms and the improvement in commodity prices which has driven up export revenues.
Much of the region is reliant on agricultural crops and commodities for export earnings, but continued economic optimism looks assured. The combined effects of further export diversification, improvements in infrastructure, industrialisation, major oil discoveries, and the potential for significant growth in commercial services, look set to turbocharge their economies.
East Africa is a well-integrated Anglophone trade hub, but the Africa Continental Free Trade Area (AfCFTA) could pave the way for the entire African continent to capitalise on its enormous growth potential. Ever-closer economic co-operation and integration will provide the bedrock for the continent’s increased competitiveness globally.
Ecobank Kenya Managing Director and Regional Executive of Central, Eastern and Southern African (CESA) countries, Mr Samuel Adjei, stated that, “The East African nations look set for continued and sustained economic growth, assisted by commodity prices and the prospect of significant oil production.
The region is a world leader in disruptive Fintech, illustrated by the resounding success of mobile money and Kenya, together with Rwanda, Tanzania and Uganda, represent a regional powerhouse for global commercial services.”
Dr Edward George, Ecobank’s Head of Group Research said: “The countries in East Africa, most of them members of the East African Community (EAC), make up one of the most dynamic commercial and economic regions in Africa.
“East Africa is a leading exporter of tea, coffee, cut flowers and minerals to world markets, is a financial, logistics and services hub, and has some of the most diverse intra-regional trade flows in Africa.
“Consumers in countries like Kenya have been transacting by mobile for more than a decade and we are now seeing East African tech hubs in Nairobi, Kigali and Kampala take a leadership role in developing innovations to address long-standing African challenges. It’s an exciting time for East Africa.”
Kenya, with its diversified commodity exports, which include tea, horticultural goods and coffee, has started producing crude oil. But in the absence of a pipeline it must all be transported to the coast by truck. Both Kenya and Uganda have proposed rival pipelines, and until a decision is made on which will proceed first, Kenya’s oil production will be constrained
Ethiopia is benefitting from strong foreign direct investment in infrastructure and industrial projects. Its coffee and gold exports have been aided by higher commodity prices, although higher oil prices could constrain its economy which is dependent on imports of petroleum products.
Transport, construction, mining, tourism and commercial services are the driving forces behind Tanzania’s strong economic performance, as it upgrades its infrastructure and industrialisation.
Uganda has diversified agricultural exports, led by coffee (it is Africa’s largest exporter of Robusta). The country plans to start exporting crude oil in 2019 and its service sector, which accounts for 52% of GDP, continues to expand strongly, supported by an emerging tech innovation sector.
Rwanda’s agricultural sector is benefitting from improved weather conditions and strengthening commodity prices are bolstering its mining exports. The government’s strong support for innovation is aimed at turning Rwanda into innovators’ preferred ‘Proof of Concept’ country in Africa.
Burundi’s fragile political situation – which has led to the suspension of donor aid – has weakened its economy, which is heavily dependent on agriculture and minerals.
The ongoing civil conflict in South Sudan has severely constrained economic growth and development of the country’s transport and social infrastructure. The country’s significant oil reserves, fertile soil with abundant water supplies and growing population could lay the foundations for strong growth in the future.
Ecobank’s flagship Africa Fixed Income, Currency and Commodities (FICC) online resource provides key facts for businesses and investors on the economies of countries in Sub-Saharan Africa and the key sectors of activity.
The website gives a country-by country analysis, including the general economic outlook, details of the FX, FI and banking sectors, and overview of the energy and soft commodity sectors, as well as of key trade flows.
By Dipo Olowookere
Investors at the Nigerian Exchange (NGX) Limited have continued to show excitement for the full-year earnings of companies on the exchange so far.
On Friday, Customs Street further appreciated by 1.01 per cent as more organization released their financial statements for the 2025 fiscal year.
During the session, traders continued their selective trading strategy, with the energy sector going up by 2.47 per cent at the close of business despite profit-taking in the banking counter, which saw its index down by 0.11 per cent.
Yesterday, the insurance space grew by 2.16 per cent, the industrial goods segment expanded by 1.70 per cent, and the consumer goods industry jumped by 0.42 per cent.
Consequently, the All-Share Index (ASI) increased by 1,722.13 points to 171,727.49 points from 170,005.36 points, and the market capitalisation soared by N1.106 trillion to N110.235 trillion from the N109.129 trillion it ended on Thursday.
Business Post reports that there were 59 appreciating stocks and 19 depreciating stocks on Friday, representing a positive market breadth index and strong investor sentiment.
The trio of Omatek, Deap Capital, and NAHCO gained 10.00 per cent each to sell for N2.64, N6.82, and N136.40 apiece, as Zichis and Austin Laz appreciated by 9.98 per cent each to close at N6.72 and N5.40, respectively.
Conversely, The Initiates depreciated by 9.74 per cent to N19.45, DAAR Communications slumped by 7.32 per cent to N1.90, United Capital crashed by 6.55 per cent to N18.55, Coronation Insurance lost 5.71 per cent to quote at N3.30, and First Holdco shrank by 5.53 per cent to N47.00.
The activity chart showed an improvement in the activity level, with the trading volume, value, and number of deals up by 33.77 per cent, 93.27 per cent, and 10.63 per cent, respectively.
This was because traders transacted 953.8 million shares worth N43.1 billion in 51,005 deals compared with the 713.0 million shares valued at N22.3 billion traded in 46,104 deals a day earlier.
Fidelity Bank was the most active with 92.4 million units sold for N1.8 billion, Chams transacted 69.2 million units valued at N310.9 million, Deap Capital exchanged 59.1 million units worth N382.7 million, Access Holdings traded 57.2 million units valued at N1.3 billion, and Tantalizers transacted 48.6 million units worth N228.2 million.
By Adedapo Adesanya
The value of the Naira contracted against the United States Dollar on Friday by 13 Kobo or 0.01 per cent to N1,366.19/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) from the previous day’s value of N1,366.06/$1.
According to data from the Central Bank of Nigeria (CBN), the Nigerian currency also depreciated against the Pound Sterling in the same market window yesterday by N2.37 to N1,857.75/£1 from the N1,855.38/£1 it was traded on Thursday, and further depleted against the Euro by 57 Kobo to close at N1,612.52/€1 versus the preceding session’s N1,611.95/€1.
In the same vein, the exchange rate for international transactions on the GTBank Naira card showed that the Naira lost N8 on the greenback yesterday to N1,383/$1 from the previous day’s N1,375/$1 and at the black market, the Nigerian currency maintained stability against the Dollar at N1,450/$1.
FX analysts anticipate this trend to persist, primarily influenced by increasing external reserves, renewed inflows of foreign portfolio investments, and a reduction in speculative demand.
In the short term, stability in the FX market is expected to continue, supported by policy interventions and improving market confidence.
Nigeria’s foreign reserves experienced an upward trajectory, increasing by $632.38 million within the week to $46.91 billion from $46.27 billion in the previous week.
The Dollar appreciation this week appears to be largely technical, serving as a correction to the substantial losses experienced from mid- to late January.
Meanwhile, the cryptocurrency market slightly appreciated, with Bitcoin (BTC) climbing near $68,000, up nearly 5 per cent since hitting $60,000 late on Thursday after investor confidence in crypto’s utility as a store of value, inflation hedge, and digital currency faltered.
The sell-off extended beyond crypto, with silver plunging 15 per cent and gold sliding more than 2 per cent. US stocks also fell.
The latest recoup saw the price of BTC up by 4.7 per cent to $67,978.96, as Ethereum (ETH) appreciated by 6.3 per cent to $2,021.10, and Ripple (XRP) surged by 9.5 per cent to $1.42.
In addition, Solana (SOL) grew by 7.3 per cent to $85.22, Cardano (ADA) added 6.1 per cent to trade at $0.2683, Dogecoin (DOGE) expanded by 5.4 per cent to $0.0958, Litecoin (LTC) rose by 5.2 per cent to $53.50, and Binance Coin (BNB) jumped by 2.3 per cent to $637.79, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
By Adedapo Adesanya
Oil prices settled higher on Friday as traders worried that this week’s talks between the US and Iran had failed to reduce the risk of a military conflict between the two countries.
Brent crude futures traded at $68.05 a barrel after going up by 50 cents or 0.74 per cent, and the US West Texas Intermediate (WTI) crude futures finished at $63.55 a barrel due to the addition of 26 cents or 0.41 per cent.
Iran and the US held negotiations in Muscat, the capital of Oman, on Friday to overcome sharp differences over Iran’s nuclear programme.
It was reported that the talks had ended with Iran’s foreign minister saying negotiators will return to their capitals for consultations and the talks will continue.
Regardless, the meeting kept investors anxious about geopolitical risk, as Iran wanted to stick to nuclear issues while the US wanted to discuss Iran’s ballistic missiles and support for armed groups in the region.
Any escalation of tension between the two nations could disrupt oil flows, since about a fifth of the world’s total consumption passes through the Strait of Hormuz between Oman and Iran.
Saudi Arabia, the United Arab Emirates, Kuwait and Iraq export most of their crude via the strait, as does Iran, which is a member of the Organisation of the Petroleum Exporting Countries (OPEC).
According to Reuters, Iran objected to the presence of any US Central Command (CENTCOM) or other regional military officials, saying that would jeopardise the process.
The current confrontation was sparked by more than two weeks of unrest in Iran that saw authorities launch a deadly crackdown that killed thousands of civilians and shocked the world. As reports of the deaths trickled out of Iran, US President Donald Trump threatened to strike Iran if any of the tens of thousands of protesters arrested were executed.
Meanwhile, Kazakhstan’s planned oil exports could fall by as much as 35 per cent this month via its main route through Russia, as the country’s top oil company, Tengiz oilfield, slowly recovers from fires at power facilities in January.
ING analysts have pointed out Iran’s neighbour, Iraq, and a disagreement with the US as another bullish factor for oil prices. It seems Iraqi politicians favour Mr Nouri al-Maliki as the country’s next Prime Minister, but the US thinks Mr al-Maliki is too close to Iran. President Trump has already threatened the oil producer with consequences if he emerges as PM.
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