Africa - 20 May 2024

20 May 2024

AFRICA

• Ivory Coast’s Coffee and Cocoa Council (CCC) has suspended about 40 co-operatives they suspect were illegally hoarding cocoa beans to sell them at a higher price to exporters struggling to fulfil their contracts, two sources at the regulator said on Friday. Exporters, who have been short of supply due to cocoa disease and adverse weather, are looking for ways to buy beans to honour their contractual obligations and some suppliers were taking advantage of the situation, the sources said. Suspended co-operatives and independent buyers have stockpiled more than 60,000 tonnes of cocoa since the start of the mid-crop in early April, the sources from the CCC told Reuters. (Source)

• Nigeria’s headline inflation surprised positively in April 2024, rising below consensus estimates (34.20% y/y). The latest data by the National Bureau of Statistics (NBS) shows headline inflation increasing to 33.69% y/y in Apr 24, from 33.20% y/y in Mar. • The pace of inflation increase is the lowest since the initial impact of the double reforms (PMS subsidy removal and FX unification) in June 2023, further underscoring our view that inflation is nearing a peak, barring any significant negative shocks to prices. Food inflation increased to 40.53% y/y, while core inflation rose to 26.84% y/y, largely reflecting the adverse base effects from the year before. (Source)

• The Bank of Zambia (BoZ) increased the monetary policy rate by 100bps, to 13.5%, after the 13-14 May meeting in response to rising inflation risks. (Source)

• Djibouti, a tiny East African nation has found itself at the center of one of the world’s most dramatic flashpoints. Not only are missiles fired by Houthi militants from Yemen at commercial ships in the Red Sea falling close to Djibouti’s 195-mile coastline, but the country of just 1 million people is surrounded by upheaval. It’s bordered to the north by Eritrea, a pariah state for the best part of two decades; to the south by Somalia, which has been ravaged for years by an Islamist insurgency; and to the west by Ethiopia, a regional powerhouse recovering from a civil war.  And yet, Djibouti has successfully positioned itself as an indispensable asset in the region. All while its government walks a diplomatic tightrope to retain neutrality. That’s been highlighted by the fallout from Israel’s war on Hamas. After the Houthi missile attacks began in October, the US asked for permission to conduct operations against the group from inside its naval base in Djibouti. The government said no, according to Prime Minister Abdoulkader Kamil Mohamed. While it’s highly critical of Israel’s response to Hamas’s attack on Oct. 7, the African nation quietly allowed naval vessels from the European Union’s Operation Aspides to dock and refuel as part of efforts to keep the Houthis at bay. (Source)

• Illicit timber fuelling Islamist insurgency in Mozambique. Timber smuggling, estimated to be worth $23 million a year, from Mozambique’s protected forests to China is helping to fund an Islamist insurgency as well as a large criminal network in the north of the country, according to the Environmental Investigation Agency (EIA), an NGO that campaigns against environmental crime. The revelation comes at the same time as a significant resurgence in fighting in the north of Mozambique. On Friday, at least 100 insurgents staged their boldest attack in three years on the town of Macomia, which was eventually stopped by the army. The location of the attack confirms that the insurgency has moved its bases further south due to the increased presence of soldiers in the north. (Source)