10th January 2024
Tensions Rise Over Red Sea
Somalia's President, Hassan Sheik Mohamud, issued a warning, pledging "all necessary measures" to defend against Ethiopia's pursuit of direct access to the Red Sea via Somaliland. Mohamud invalidated Ethiopia's deal with Somaliland, denouncing it as unacceptable. The Jan. 1 agreement allowed Ethiopia a 50-year sea corridor lease in exchange for a stake in Ethiopian Airlines. Mohamud seeks support from foreign actors. Egypt expressed support for Somalia's sovereignty. Djibouti urged de-escalation, while Ethiopia and Somaliland discussed military cooperation. Protests erupted, leading to arrests in Somaliland, intensifying tensions in the Horn of Africa.
Dangote Refinery Fires Up
Dangote Group's colossal African refinery is poised to begin operations after securing the six million barrels of crude required for test production. The refinery, near Lagos, is Africa's largest and will significantly impact regional and global crude and fuel markets upon full operation. Although the maiden cargo arrived, experts anticipate months before full-scale production. With the capacity to meet Nigeria's fuel demands and surplus for exports, the Dangote refinery aims to transform the energy landscape. The facility, supplied by domestic and international crude, holds the potential to influence Africa's energy dynamics and trade relationships.
Ghana Nears Debt Revamp
Ghana anticipates a draft term sheet for the restructuring of its $5.4 billion bilateral debts, allowing the country to seek a $600 million disbursement from the IMF. Finance Minister Ken Ofori-Atta expects approval during the IMF board meeting on January 18. The move follows Ghana's debt restructuring efforts initiated in December 2022. Successful restructuring could also unlock $550 million from the World Bank by February. Ghana's debt, excluding state-owned enterprise loans, decreased to 66.4% of GDP by September 2022. Dollar bonds rose on the news, with the 2027 bonds up 1.3% to 43.88 cents.
Africa's Economic Outlook Soars
Despite economic challenges, Sub-Saharan Africa is set for a brighter outlook in 2024, with six of the world's top-10 performing economies predicted to come from the region, according to the International Monetary Fund. Smaller but vibrant economies like Ivory Coast and Tanzania, with growth rates of 6.6% and 6.1%, respectively, contribute to the positive shift. The IMF forecasts regional growth to reach 4% in 2024, up from 3.3% in 2023, with Nigeria and South Africa pursuing reforms for potential future benefits. Nigeria's growth is projected at 3%, while South Africa aims for 1.8% in 2024.
