11-18 July 2024 Weekly Economics Wrap: Cross-Border Green Hydrogen Pipeline Feasibility Study Advances Amid Economic Shifts Across Southern Africa and Global Markets

Namibia-South Africa Green Hydrogen Pipeline Feasibility Study

The Mines and Energy Ministry of Namibia has announced plans to conduct a N$5 million feasibility study for a cross-border green hydrogen pipeline linking Namibia and South Africa. This initiative, overseen by Namibia’s Green Hydrogen Programme, follows the signing of a Memorandum of Understanding between the two nations at the May 2024 World Hydrogen Summit.

South African Economic Highlights

• Rand Strengthens on U.S. Inflation Data: On Friday, July 12th, the South African rand continued its upward trajectory, supported by lower-than-expected U.S. inflation figures. Reuters reported a closing rate of 18.00 against the dollar, marking a 0.1% increase from the previous day’s close.
• Climate Finance Influx: South Africa’s National Treasury anticipates up to $2.4 billion to flow into the country this year from a climate finance agreement with leading global economies. Under the Just Energy Transition Partnership, pledges totaling $9.3 billion have been secured in the form of grants, loans, and guarantees.

African Economic Updates

• Nigeria’s Budget Shortfall Addressed: President Bola Tinubu has urged the Nigerian Senate to approve an additional US$4 billion to offset gaps in the national budget for the current fiscal year. Reuters reported that Tinubu also proposed a one-off windfall tax on banks’ foreign exchange gains to generate revenues for critical sectors.
• Zimbabwe’s Commitment to New Currency: Zimbabwe’s central bank governor affirmed the government’s commitment to back its new currency, Zimbabwe Gold (ZiG), with reserves. This move aims to instill confidence in ZiG, launched in April amid past challenges with local currencies.

International Economic Developments

• U.S. Political Uncertainty Impacts Markets: On Monday, July 15th, U.S. bond futures declined and the dollar strengthened amid investor perceptions that criticism directed at U.S. presidential candidate Donald Trump could enhance his electoral prospects, introducing new political uncertainties. Reuters noted that thin trading volumes influenced modest dollar gains and lower Treasury futures.
• Oil Price Volatility: Oil prices experienced a second consecutive day of decline on Monday, influenced by a stronger dollar amidst political instability following an attack on Donald Trump. Market focus also included efforts towards a ceasefire in Gaza.
• Rising Coffee Prices: Due to supply shortages in key coffee-growing regions and new deforestation regulations in Europe, coffee prices are projected to rise until mid-2025. Roasters are already paying premiums well above futures prices for Vietnam’s beans, reflecting this year’s poor harvest conditions.

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