Weekly Economics Wrap: 18-July 25, 2024

Namibia

• Pension-Backed Housing Loans: The Government Institutions Pension Fund (GIPF) is advancing plans for a pension-backed housing loan scheme. The initiative will leverage its subsidiary Kuleni Financial Services and housing loan fund manager First Capital Treasury Solutions. A Memorandum of Agreement is under review by the Office of the Prime Minister, as reported by The Brief.
• Coastal Desalination Project: NamWater and Husab Mine are set to achieve financial closure for the N$3 billion coastal desalination project by year-end. Husab Mine will fund the construction, easing the financial burden on NamWater, which was expected to secure N$2.5 to N$3 billion independently, according to The Brief.

South Africa

• Rand Weakens: The South African Rand weakened to 18.40 against the U.S. dollar, a 0.9% drop from Monday’s close. Investors are cautious ahead of June inflation data and the U.S. presidential race, as noted by Rand Merchant Bank analysts.
• Shein’s Expansion: Fast-fashion retailer Shein will open a pop-up store in Johannesburg this August, marking a step in its global expansion strategy. The move follows a surge in online shopping during the COVID-19 pandemic.

Africa

• Nigeria’s Interest Rate Hike: Nigeria’s central bank raised its benchmark interest rate to 26.75% from 26.25%, marking the fourth increase this year. The move aims to combat 28-year-high inflation and pressure on the naira, according to Reuters. Governor Olayemi Cardoso highlighted that rising food and energy costs continue to drive inflation.
• Eni’s Sale Approval: Eni has received approval from the Nigerian Upstream Petroleum Regulatory Commission to sell its unit, Nigerian Agip Oil Company, to Oando. This acquisition will bolster Oando’s onshore oil and gas operations, including power generation.

International

• SAP’s Strong Performance: Europe’s largest software maker, SAP, reported a 25% increase in its cloud business and a 10% rise in total revenue for Q2, reaching 8.29 billion euros. The results exceeded analysts’ expectations, driven by robust demand for its business planning software.
• Oil Prices Rebound: U.S. crude inventories decline led to a rebound in oil prices. Brent crude futures for September rose by 46 cents, and U.S. West Texas Intermediate crude increased to $77.38 per barrel, amidst tempered expectations of a ceasefire deal in the Middle East.
• Currency Movements: The Japanese yen gained support from unwinding carry trades and safe-haven bids ahead of the Bank of Japan policy meeting. The Australian and New Zealand dollars faced challenges from weak commodity prices, while the euro weakened following a disappointing purchasing managers’ index reading. The U.S. dollar remained steady as markets awaited growth figures later in the week.