Macro Analysis /

BancTrust & Co. Africa Daily Comments 10 March 2023

  • Nigeria's USD11bn P&ID trial ends, verdict expected in a few weeks

  • Bank of Ghana to push T-bill rates down to 15%

  • Kenya's water and sewerage costs could rise to support network upgrades

Ramiro Blazquez
Ramiro Blazquez

Head of Research and Strategy

BancTrust & Co.
10 March 2023
Published byBancTrust & Co.

Nigeria (B-/Caa1/B-)

Nigeria's USD11bn P&ID trial ends, verdict expected in a few weeks

The USD11bn trial between the Nigerian government and Process & Industrial Development came to an end yesterday following allegations of bribery and fabrication of evidence that were traded between both sides. While a judgement is not expected for a few weeks, according to Bloomberg, the case is significant as it could cost the country almost a third of its foreign currency reserves. Nigeria maintains that the 2010 failed gas deal stems from “bribery of epic and industrial scale” while lawyers representing the country in the 2017 arbitration case were bought off resulting in the award of USD6.6bn against the government, which has now ballooned to the USD11bn with interest.

Ghana (SD/Ca/RD)

Bank of Ghana to push T-bill rates down to 15%

The Ghanaian government is targeting to push T-bill rates to as low as 15%, from 30% levels recently seen, as part of efforts to reduce its domestic debt service following the completion of its Domestic Debt Exchange Programme (DDEP). The aggressive move by the government is expected to be in-line with its medium-term Debt Sustainability Analysis. Media reports that the move by the government could be supported by the oversubscription in recent auctions as investors focused on government instruments such as T-bills, that were excluded from the DDEP.

Kenya (B/B)

Kenya's water and sewerage tariffs could rise to support network upgrades

Kenya’s Water Services Regulatory Board could raise water tariffs while sewerage cost could also increase as part of the plans to raise USD1.3bn (c.1% of GDP) for expansion and upgrades of ageing networks. According to media reports, the government has identified reforms with the support of the World Bank to help mobilise additional funds required to meet the country’s target for water and sanitation including increasing tariffs to cover 150% of the operating costs of the state backed firms, from 105% currently. However, the plan to increase in tariffs could add to inflationary pressures in the economy, which continues to struggle with foreign currency shortages.

Our Latest Reports:  

Nigeria: "Tinubu wins presidential race, Eurobonds reflect opposition's rejection", 1 March

Nigeria Elections: "Political noise likely to drive Eurobonds pricing", 24 February

Flash Report: "Nigeria: Central bank to remain hawkish despite uncertain inflation outlook", 15 February

Flash Report: "Ghana: Debt swap participation exceeds target but concerns on IMF timing remains", 14 February

Macro Analysis: "Nigeria: Photo-finish scenario in elections could spur bonds price volatility", 6 February

Flash Report: “Ghana adds to uncertainty, extends deadline for debt exchange again”, 17 January

Ghana: "Ghana: Domestic swap conditions success of external exchange", 13 January.

BancTrust & Co. Research & Strategy Team.