Is Malawi the new Kenya?
Headline: After Kenya's cap on interest commercial lending rates, is Malawi next? Certainly, there is considerable disquiet following last week's 4pp cut in the policy rate by the Reserve Bank of Malawi from 22% to 18%. Despite the sharp decline in the rate at which commercial banks can borrow from the central bank, several influential commentators, including former RBM Governor, Perks Ligoya and Consumers Association of Malawi executive Director have argued that the commercial lending rate of around 27% is excessive. The issue has also attracted the attention of parliament with the chairperson of the Budget and Finance Committee, Rene Chiphiko, noting that the Committee plan to raise the matter with the RBM.
Economics: Senegal, Ghana and Mozambique saw falls in headline inflation during June. Annual consumer price growth in the former slowed for the third month in a row to 1.4%, which is a 7-month low, while the inflation rate in Ghana fell to 12.1%, the lowest rate since September 2013, from May's 12.6%. Inflation in Mozambique saw its inflation rate decline to 18.1% y/y from 20.45% the previous month. Prices also declined by 1.2% m/m following a 0.38% drop in May.
Following yesterday's news that manufacturing output in South Africa declined by 0.8% in May from an upwardly revised 4.2% decline in April, today's FNB/BER Q2 consumer confidence index showed that sentiment dipped to -9 from -5 in Q1.
Despite concerns about Kenya's twin deficits and political risks in the run-up to next month's election, Fitch Ratings upheld Kenya's B+ sovereign rating with a negative outlook.
Business: The Dangote group of Nigeria announced plans to boost agricultural output across the continent with over $4.5bn investments over the next two years including, sugar, rice and dairy farming.
President Lungu of Zambia announced that Zambia Consolidated Copper Mines Investment Holdings and China's Sinoconst plan to construct a $548m cement plant in Ndola in order to help diversify the economy away from copper production. The plant is planned to be completed by 2020 with a daily output of 5000 metric tonnes.
Bamburi Cement of Kenya, the country's largest cement producer, announced a $40m expansion of its plant at Athi River which will increase annual output by 900k metric tonnes.