9th November 2023
Tinubu Signs
Nigerian President Bola Tinubu signed a $2.8 billion supplementary budget, allocating funds for bulletproof cars, a presidential yacht, and renovations, sparking criticism amid a cost-of-living crisis. While the budget aimed to address urgent issues like defense and security, allocations for perceived luxury items and residential upgrades drew public ire. Critics argue the spending is insensitive to citizens grappling with inflation and economic challenges. Tinubu, facing pressure to offer relief, urges patience with ongoing reforms in the nation plagued by inflation, currency woes, insecurity, and oil theft.
Naira Slide Resumes
The Nigerian naira weakened by about 7% to 1,150 naira per dollar on the parallel market due to a backlog of unsettled foreign-exchange forward contracts. Despite the central bank's efforts to clear contracts with some banks, analysts note that the outstanding amount remains substantial. The naira had strengthened to 950 per dollar last week after the central bank's announcement. Airlines are facing challenges repatriating income, with a large backlog of unmet requests for dollars. The government aims to attract $10 billion in inflows to clear the backlog and stabilize the currency. Nigeria's President Bola Tinubu will attend the Saudi-Africa summit in Riyadh this week to attract foreign direct investment
Malawi Devalues Again
Malawi's central bank is devaluing its kwacha currency by about 30% against the dollar, setting a new exchange rate at 1,700 kwacha from the previous 1,180. This marks the second significant devaluation, aimed at addressing supply-demand imbalances and preventing arbitrage opportunities. The move aims to stabilize foreign currency reserves amid pressure from rising commodity prices and falling revenue from tobacco exports. The central bank plans close monitoring to prevent market disorder.
Egypt LNG Crisis
Tight gas balances and reduced imports from Israel make it unlikely for EU countries to receive more liquefied natural gas (LNG) from Egypt in the short to medium term. The country's gas production had already declined to a three-year low, facing increased demand amid power cuts. The June 2022 Memorandum of Understanding committing to higher supply is now likely undeliverable due to the Israel-Hamas conflict and the resulting shutdown of the Israeli Tamar gas field. Egypt's LNG exports are expected to remain low, impacting its ability to meet commitments outlined in the agreement with the EU and Israel.
