1-8 August Weekly Economic Wrap: Mining Growth in Namibia, South African Refinery Deal, and Global Currency Fluctuations

Namibian Highlights:

• Mining Sector Growth: Research by Simonis Storm reveals an 18.2% increase in the real value added by Namibia’s mining and quarrying sector for Q1 2024. This growth has elevated its contribution to Namibia’s GDP from 0.6% in 2015 to 1.4% today, attributed to continued investments in oil and gas activities.
• Nedbank’s Avo SuperShop Expansion: Since its launch in late 2023, Nedbank’s Avo SuperShop has attracted over 1,800 users and offers more than 3,000 products from 19 merchants. User growth and merchant additions are expected to persist, according to Nedbank Group’s interim results for the six months ending June 30, 2024.

South African Updates:

• Shell and BP Payment: Shell and BP’s South African units will pay approximately $15 million to the Central Energy Fund for operational costs at the Sapref refinery, which they are selling to the government. This payment is anticipated to help revitalize South Africa’s largest refinery and ensure stable petroleum supplies amid declining refining capacity.
• JSE Listings Outlook: The CEO of Johannesburg Stock Exchange Ltd expressed cautious optimism about new company listings for the remainder of the year, as the market stabilizes post-South Africa’s May elections. The exchange has seen a resurgence in listings after a period of minimal IPOs and numerous delistings since 2020.

African Developments:

• Zahid Group’s Acquisition Talks: Saudi Arabia’s Zahid Group is negotiating to acquire Barloworld, an African distributor of Caterpillar equipment. The South Africa-based company, valued at about R16.4 billion, has been the target of Zahid Group’s share purchases over the past four years.
• Nigeria’s Oil Production: Nigeria’s oil production has increased to between 1.6 million and 1.7 million barrels per day, up from 1.2 million barrels per day in February. This rise follows enhanced security measures to combat crude theft, although Shell’s exit from the country has impacted the industry landscape.

International Insights:

• U.S. Dollar Fluctuations: The U.S. dollar fell to a near 7-month low against major currencies, dropping 0.7% to 102.39 on Monday. It rebounded slightly on Tuesday, rising 0.54% to 145.01 yen after significant declines in recent days.
• Oil Price Recovery: Oil prices increased for the third consecutive session on Thursday following a notable draw in U.S. crude stockpiles. Brent crude futures rose by 23 cents to $78.56 per barrel, and U.S. West Texas Intermediate (WTI) crude gained 29 cents to $75.52, recovering from earlier lows driven by recession fears and a global stock selloff.