Weekly Economics Wrap 17-22 February 2024: A Snapshot of Global and African Economic Developments

Puma Energy Namibia Halts EV Charging Station Initiative

Puma Energy Namibia has temporarily suspended its initiative to install electric vehicle (EV) charging stations nationwide. The decision is attributed to the low adoption of electric vehicles and the high associated costs. Adell Samuelson, General Manager of Puma Energy Namibia, highlighted challenges such as affordability and limited range, contributing to a lack of interest among potential buyers.

Namibia Faces Grey Listing for Non-Compliance

Namibia is on the verge of grey listing for non-compliance with international anti-money laundering standards. Finance Minister Iipumbu Shiimi announced that Namibia passed the technical compliance test, making progress in five out of 11 effectiveness test outcomes. However, with 13 unresolved action items out of 72, the nation faces imminent scrutiny.

South Africa’s Unemployment Rate Rises Amidst Pandemic Recovery Concerns

Contrary to the usual trend of job additions during the holiday season, South Africa’s unemployment rate increased in the fourth quarter. Analysts note a rise from 31.9% to 32.1%, signaling a halt in the labor market recovery from the COVID-19 pandemic. This bleak picture emerges just months ahead of the country’s national and provincial elections.

Rand Strengthens Amid Budget Speech Anticipation

On February 17th, the South African Rand strengthened, closing below the 19.0 handle in anticipation of the upcoming budget speech. Trading at 18.9000 against the dollar, the currency showed a 0.3% improvement from its previous close. Market sentiment and anticipation surrounding fiscal policy developments play a crucial role as investors await insights from the budget speech.

African Economic Challenges: Growth Decline and Nigerian Naira Woes

The African Development Bank reported a decline in Africa’s economic growth to 3.2% last year, down from 4.1% in 2022 and below the November forecast of 3.4%. Economic challenges stem from political instability, China’s economic slowdown, and ongoing impacts of COVID-19 and Russia’s conflict in Ukraine. Additionally, the Nigerian naira experienced a significant decline, reaching record lows on both official and unofficial markets, triggering a substantial one-day fall in local stocks.

International Market Movements: Oil Prices and U.S. Dollar Decline

Oil prices saw a modest increase on Thursday, driven by indications of tightening supply. U.S. West Texas Intermediate (WTI) crude futures rose, while Brent crude edged up, reaching $82.24 per barrel. In early Asian trading on Tuesday, oil prices remained relatively stable, near three-week highs, driven by increased tensions in the Middle East and a rebound in demand from China. Meanwhile, the U.S. dollar declined as concerns about the country’s economic strength emerged, influenced by higher-than-expected producer prices and expectations of delayed interest rate cuts.

Stay tuned for our weekly economic updates, providing insights into the dynamic shifts shaping global and African economies.