27 June-4 July 2024 Weekly Economics Wrap

In this week’s economic highlights, several key developments have shaped the financial landscape across Southern Africa and beyond.

Namibia

OK Foods reported the largest overall year-on-year decrease in basket cost among the seven stores surveyed by The Brief. The basket cost close to N$1100 in June last year, compared to N$984.11 this past June, marking a significant drop of 11.65%.

In a move that could bolster regional fuel supply chains, Botswana President Mokgweetsi Masisi announced that the Botswana Oil Company has begun discussions with the Namibia National Petroleum Corporation. This collaboration aims to explore shared fuel storage facilities at Walvis Bay to improve fuel transportation and streamline oil sourcing from Angola.

South Africa

TotalEnergies SE is planning to exit its gas condensate discoveries off the coast of South Africa to prioritize exploration in areas closer to Namibia. The company invested 7.4 billion rand in the Brulpadda and Luiperd fields but now doubts their commercial viability due to South Africa’s relatively small gas market. This exit could impact the nation’s plans to reduce coal dependence.

South African assets saw gains on Wednesday, buoyed by optimism following comments from the Federal Reserve chair suggesting that U.S. interest rate cuts were imminent. By late afternoon, the rand traded higher against the dollar, showing a 1% increase from its previous close.

Africa

The World Bank has approved an additional $200 million in grants for Zambia to help the country cope with its worst drought in decades. Additionally, an almost $8 million grant has been approved for women and girl empowerment.

In Nigeria, the upstream oil regulator has approved the sale of two key onshore assets by international oil companies, allowing Oando and new entrant Project Odinmim to acquire the assets. The head of the Nigerian Upstream Petroleum Regulatory Commission, Gbenga Komolafe, announced the approval at an energy conference in Abuja.

International

Oil prices edged up in early trade Monday morning, driven by forecasts of a supply deficit due to peak summer fuel consumption and ongoing OPEC+ production cuts in the third quarter. However, the gains were tempered by global economic challenges and increasing output from non-OPEC+ countries.

Rupert Murdoch’s Fox Corporation is set to enter the UK’s highly competitive free, ad-supported video streaming market with Tubi. The platform will compete with major players like Netflix and Disney+. Tubi has been rapidly gaining market share in the US, boasting almost 80 million monthly active users according to Fox.

Asian stocks surged to 27-month highs on Thursday following softer U.S. economic data, which reduced the likelihood of a September interest rate hike. This boosted bonds and commodities while weakening the dollar. Thin trading occurred due to a U.S. holiday as investors awaited the outcome of the UK election, where the Labour Party is expected to win by a significant margin, potentially altering market dynamics.

Stay tuned for more updates on these and other economic developments in the coming weeks.