Economy
Rwanda’s Economic Performance Remains Strong—IMF
By Modupe Gbadeyanka
An International Monetary Fund (IMF) team, led by Laure Redifer, visited Kigali from October 19-November 2, 2016 to carry out discussions with the Rwandan authorities on the sixth review of their economic and financial program supported by the IMF’s Policy Support Instrument (PSI), and the first review of policies supported by the IMF’s Stand-by Credit Facility (SCF).
At the end of the review, Ms Redifer rated the country’s economic performance strong, with a GDP growth of 6.5 percent in the first half of 2016.
“The IMF team reached staff-level agreement with the government, subject to approval by IMF Management and the Executive Board, on policies that could support completion of the sixth and first reviews of Rwanda’s PSI- and SCF-supported programs, respectively. The Executive Board is scheduled to consider the reviews in January 2017.
“Rwanda’s economic performance remains strong, with GDP growth of 6.5 percent in the first half of 2016. Growth projections for the year remain at 6 percent, driven by services activity, with somewhat lower growth in agriculture due to the recent drought, and a contraction in manufacturing/construction following the end of a recent investment boom. 12-month consumer price inflation has risen in recent months to about 6 percent, due mainly to higher food prices and, to a lesser extent, higher import prices following recent depreciation of the Rwandan franc,” the IMF report said.
“The main near-term objective of the current programs is to respond to adverse global developments, most notably commodity prices, which has led to growing external imbalances, resulting in pressure on the Rwandan franc and the banking system’s foreign exchange reserves,” the body explained.
It said, “To address external imbalances, short term adjustment policies have been put in place, comprised of: continued exchange rate adjustment, resulting in Rwandan franc depreciation of about 9 percent so far in 2016; modest containment of new public spending to protect priority spending while avoiding a spike in the fiscal deficit despite recent shortfalls of external financing; and a more prudent monetary policy stance, consistent with less expansive private sector credit growth. IMF staff agreed with the government’s assessment that longer term policies should help restore external sustainability. These include accelerating policies to support larger and more diverse exports and promoting domestic production of certain products currently imported, through the recent ‘Made in Rwanda’ campaign.”
The IMF noted that, “Performance under the program has been strong, with almost all program targets set through end-June 2016 being achieved. Nascent signs suggest that adjustment policies are proving successful at reducing the trade deficit for goods and services, further abetted by the recent completion of several large public investment projects.
“Although these developments are likely to contain growth at a still-robust 6 percent through 2017, by reducing external imbalances they should help maintain official foreign exchange reserves coverage at adequate levels.
“IMF staff welcomes the early and decisive actions already taken by the government, which will help to avoid a more serious situation. These policies should thereby help safeguard medium term growth prospects — around 7 percent –by avoiding potentially harsher adjustment policies that are more disruptive to growth. Depending upon weather and agriculture, inflation is expected to get back toward the government’s medium term 5 percent target.
“To further support program objectives, the government plans to implement measures aimed at deepening financial market activity and improving effectiveness of monetary policy are welcomed. Moreover, measures to strengthening domestic revenue collection and enhance budget execution reporting for the purposes of budgetary planning should be beneficial.”
Also, it was stated that the mission met with Minister of Finance and Economic Planning, Claver Gatete, Governor of the National Bank of Rwanda, John Rwangombwa, Minister of Trade, Industry and East African Community Affairs, François Kanimba, Minister of Gender and Family Promotion, Esperance Nyirasafari, Minister of Infrastructure, James Musoni, Members of the Parliament Budget Commission, and other senior government officials, private sector representatives, and development partners. The team thanks the various interlocutors for the collaborative and candid discussions.
By Dipo Olowookere
The recalibration of portfolios by investors further depressed the Nigerian Exchange (NGX) Limited on Thursday by 0.05 per cent in the absence of a positive trigger.
Amid the profit-taking, the banking space continued to witness bargain-hunting during the session, rising at the close of business by 1.04 per cent.
However, sell-offs crushed the insurance sector by 1.23 per cent, the consumer goods index depreciated by 0.81 per cent, and the energy sector lost 0.36 per cent, while the industrial goods counter closed flat.
As result, the All-Share Index (ASI) depreciated by 47.93 points to 102,788.20 points from 102,836.13 points and the market capitalisation gained N1 billion to close at N63.148 trillion compared with the preceding day’s N63.147 trillion.
Like the previous session, the market breadth index was flat after the bourse ended with 28 price gainers and 28 price losers.
Morison Industries depleted by 9.98 per cent to N3.61, C&I Leasing slumped by 9.91 per cent to N3.91, Ikeja Hotel crashed by 8.89 per cent to N12.30, Neimeth went down by 8.51 per cent to N3.44, and Sunu Assurance shed 8.03 per cent to settle at N5.50.
But SCOA Nigeria gained 9.76 per cent to sell for N3.60, DAAR Communications increased by 9.09 per cent to 84 Kobo, May and Baker jumped by 8.43 per cent to N9.00, Prestige Assurance appreciated by 6.82 per cent to N1.41, and Red Star Express chalked up 4.99 per cent to finish at N5.05.
The activity chart was mixed yesterday after the trading volume shrank by 0.10 per cent, the trading grew by 50.00 per cent, and the number of deals leapt by 12.95 per cent.
A total of 394.4 million stocks valued at N22.8 billion were traded in 12,160 deals during the session versus the 394.8 million stocks worth N15.2 billion transacted in 10,766 deals in the preceding day.
GTCO ended as the busiest equity after the sale of 42.2 million units for N2.6 billion, UBA traded 37.5 million units worth N1.3 billion, Zenith Bank transacted 25.2 million units valued at N1.2 billion, Access Holdings exchanged 24.3 million units for N601.6 million, and Jaiz Bank traded 13.8 million units worth N41.4 million.
By Adedapo Adesanya
Nigerian energy company, Oando Plc, has won the bid for the operatorship of oil block KON 13 in Angola.
The company, which recently acquired Eni of Italy’s oil assets in Nigeria, disclosed on Wednesday that the award of the oil block located in Angola’s onshore Kwanza Basin followed a competitive bidding process by the country’s oil and gas sector regulator.
Oando disclosed that the asset, in which it owns 45 per cent participating interest, has an estimated prospective resources of 770 to 1,100 million barrels of oil. Oando is handling its operations relating to the asset through its upstream subsidiary, Oando Energy Resources (OER).
“Oando Plc (the company), Africa’s leading indigenous energy solutions provider listed on both the Nigerian Exchange Limited and Johannesburg Stock Exchange is pleased to announce that its upstream subsidiary, Oando Energy Resources (OER), has been awarded operatorship of Block KON 13 in Angola’s Onshore Kwanza Basin, following a competitive bidding process organised by the Angolan National Agency for Petroleum, Gas, and Biofuels (ANPG).
“Block KON 13 is strategically located in the prolific Kwanza Onshore Basin which represents significant exploration potential in both pre-salt and post-salt plays, with estimated prospective resources of 770 to 1,100 million barrels of oil.
“The block has two exploration wells previously drilled to a target depth of 3,000m, with oil and gas observed across various depths. With a 45 per cent participating interest, OER will lead the development of the block as an operator, alongside Effimax (30 per cent) and Sonangol (15 per cent) as co-venturers,” it stated.
Commenting on the award, the chief executive of Oando Plc, Mr Wale Tinubu, expressed confidence in the capacity of the company, in collaboration with its co-venturers, to unlock the full potential of the asset for the country.
“We look forward to collaborating with our co-venturers and other key stakeholders to harness this opportunity and unlock its full potential for Angola and Africa as a whole,” Mr Tinubu said.
This milestone, the company said, marks its strategic entry into the Angolan oil and gas market and represents a significant step in its long-term vision to grow its upstream operations across Africa.
According to Oando Plc, it also solidifies the company’s position as a prominent player in the continent’s energy landscape, evolving from a local indigenous operator to a regional powerhouse.
Following the company’s recent successful acquisition of NAOC Ltd in Nigeria, the addition of Block KON 13, the energy firm stressed, further bolsters the company’s upstream portfolio and reflects its commitment to driving regional growth and energy security.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange appreciated by 0.74 per cent on Wednesday, January 22 as a result of buying pressure on the market.
Yesterday, the NASD Unlisted Security Index (NSI) garnered 22.86 points to wrap the session at 3,123.19 points compared with 3,100.33 points recorded in the previous session, as the value of the unlisted securities market went up at midweek by N5 billion to close at N1.076 trillion, in contrast to the preceding day’s N1.071 trillion.
The alternative bourse ended with three price gainers and two price losers at the Wednesday session.
Mixta Real Estate Plc improved its value by 25 Kobo to end at N2.83 per unit compared with the previous day’s N2.58 per unit, Okitipupa Plc jumped by N3.56 to close at N43.55 per share versus N39.99 per share, and First Trust Mortgage Bank Plc added 2 Kobo to settle at 39 Kobo per unit compared with Tuesday’s trading price of 37 Kobo per unit.
On the flip side, UBN Property Plc lost 16 Kobo to end at N1.86 per share, in contrast to the preceding session’s N2.00 per share, and Mass Telecomm Innovation Plc went down by 1 Kobo to 41 Kobo per unit from 40 Kobo per unit.
During the session, there was a 216.2 per cent rise in the volume of securities traded to 581,160 units from 183,780 units, the value of securities traded by investors decreased by 48.9 per cent to N2.3 million from N4.5 million, while the number of deals increased by 84.6 per cent to 24 deals from 13 deals.
When the bourse closed for the day, Industrial and General Insurance (IGI) Plc was the stock with the highest trading volume (year-to-date) with 25.3 million units valued at N5.9 million, followed by Geo-Fluids Plc with 9.1 million units sold for N44.0 million, and FrieslandCampina Wamco Nigeria Plc with 4.1 million units worth N162.9 million.
By value, FrieslandCampina Wamco Nigeria Plc topped the activity chart after selling 4.1 million units worth N162.9 million, trailed by Geo-Fluids Plc with 9.1 million units sold for N44.0 million, and 11 Plc with 55,358 valued at N14.5 million.
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