22-29 August 2024 Weekly Economics Wrap: Global Economic Snapshot: Namibia’s Oil Boom, South Africa’s Market Movements, and International Financial Trends

Namibia’s Economic Growth Fueled by Oil and Gas Sector

Namibia is set for a robust economic outlook with a forecasted GDP growth of 5.8% annually, largely driven by the burgeoning oil and gas sector. Deloitte’s recent Oil and Gas Industrial Baseline Survey reveals that this sector will contribute an average of N$11.5 billion to the GDP each year during the production phase. The discovery of significant crude oil reserves has sparked heightened interest in Namibian assets, leading to a notable surge in the index fund tracking local government bonds. The Exchange Traded Fund, listed on both Namibian and South African stock exchanges, has surged over 20% in U.S. dollar terms since Galp’s announcement in April about the Mopane field potentially holding at least 10 billion barrels of oil.

South African Market Updates

Shares of Bidcorp, a major player in the food services industry, saw a 6% increase on Wednesday following a 15% rise in its headline earnings. This growth was driven by strong performance across various markets, with notable success in South Africa. Additionally, Nicky Newton-King, former CEO of the Johannesburg Stock Exchange (JSE), has joined the board of MTN’s financial services business. This appointment is part of MTN’s broader strategy to enhance leadership across its fintech and Bayobab business divisions.

African Economic Highlights

Naspers, Africa’s largest company by market value, is projecting that e-commerce and digital platforms will contribute R91.4 billion to the South African economy by 2035. This strategic move is expected to bolster Naspers’ competitive edge against Amazon.com, which entered the South African market in May through its acquisition of Takealot, the leading online retailer in the region. Meanwhile, Nigeria’s economy experienced a 3.19% expansion in the second quarter of 2024, driven by increased crude oil production and a strong performance in the services sector. This growth surpasses the 2.51% recorded in Q2 2023 and the 2.98% in Q1 2024.

International Financial Developments

Asian equities and the Japanese yen saw gains on Monday following comments from U.S. Federal Reserve Chair Jerome Powell suggesting the potential for interest rate cuts, possibly as early as next month. Powell’s remarks have positively impacted investor sentiment, helping to offset earlier market volatility. Nvidia also reported impressive second-quarter earnings, with adjusted EPS of $0.68 on revenue of $30 billion, surpassing analysts’ expectations of $0.64 EPS and $28.8 billion in revenue. This reflects a 122% year-over-year revenue increase and a 168% rise in earnings, with the company’s forecast for the current quarter also exceeding expectations.

In currency news, the dollar steadied on Thursday after previous losses, as traders awaited the release of the core personal consumption expenditures (PCE) price index on Friday. The PCE price index, the Federal Reserve’s preferred inflation gauge, is anticipated to offer crucial insights into the future trajectory of U.S. interest rates amid a relatively quiet week for major market-moving data.