14th February 2024
Ethiopia Nears Launch of First Stock Exchange
Ethiopia's Capital Market Authority is set to usher in foreign investment banks as it enters the final phase of its inaugural stock exchange launch. Following six months of rigorous development, the regulator will commence issuing investment bank licenses from February 12th, marking a historic milestone. Director-General Brook Taye revealed private companies, including banks, have shown keen interest, with discussions underway with government institutions and foreign banks. With minimum capital requirements set, the country's first comprehensive legal framework for capital market service providers aims to attract both domestic and international investors. Amidst efforts to liberalize the financial sector, Ethiopia anticipates increased competition, aiming to tap into its burgeoning banking sector valued at approximately US$43 billion.
Naira Hits Record Low Against Dollar
Nigeria's naira plummeted to an all-time low against the dollar, reaching 1,534.39 in the NAFEM window, reflecting a 4.2% drop and marking the lowest level since Bloomberg began tracking. With a more than 60% decrease in dollar trading volumes, pressure intensified on the currency, according to Chapel Hill Denham. The central bank, facing mounting pressure, may consider rate hikes to attract foreign exchange inflows at its upcoming policy meeting. Despite recent reforms aimed at bolstering market liquidity, concerns persist over consistency. At the parallel market, the naira traded stronger at 1,497 per dollar.
Kenya Navigates Risk with High-Interest Bond
Kenya has opted for a daring move, accepting a more than 10% interest rate on a new international bond to avert a potential default later this year, despite the historical risks attached. Amid global interest rate surges, double-digit borrowing costs signal underlying economic instability. Faced with an imminent $2 billion bond payment in June, Kenya seized the opportunity to repurchase most of the bond and issue a new $1.5 billion note due in 2029. Although relief followed the avoidance of default, concerns loom over the high 10.375% effective interest rate. Analysts caution against such rates, citing past defaults among countries facing similar financial pressures.
Senegal Internet Shutdown Amid Election Crisis
Senegal provoked outcry by cutting mobile internet access ahead of a banned protest against the delayed presidential election. The postponement to December has sparked nationwide unrest, with critics condemning it as an attempt to extend President Macky Sall's rule. The move, following deadly clashes, drew condemnation from rights groups and the UN for violating freedom of assembly and expression. Amidst rising tensions, organizers rescheduled the march for Saturday. International pressure mounts on Senegal to hold elections promptly and handle protests with proportionate force, amidst fears of prolonged instability in the normally stable democracy.
