Foreign exchange market

This week, the meeting of the monetary policy committee, (FOMC) gave a new direction to the foreign exchange market. Some Fed officials are beginning to wonder if it might soon be time to consider a plan to reduce central bank purchases of Treasuries and other assets, if the U.S. economy continues to improve. at this rate.

For its part, Nigeria is allowing the naira to weaken with a view to a possible standardization of exchange rates. According to traders, the naira situation could be a move by the central bank to unify multiple exchange rates. After trading in a range of 380 and 381 to the dollar since July last year, the naira hit an all-time high of 419.75 against the dollar.

Cryptocurrency

Musk has been pushing investors to pull out of the Cryptocurrency market for the past few days. The most famous cryptocurrency fell by more than 30% on Thursday. It climbed to 30,405.50 dollars, losing nearly 50% since its highest reached in mid-April (63,410 dollars) dragging the other currencies down with it. While the cryptocurrency market is going through this bad patch, the Biden administration decides to neutralize the fiscal blind spot that cryptocurrencies represent. It proposes, as part of its tax reform, to include them in tax returns.

In addition, Facebook announces that it is refocusing its digital currency project on the dollar with a view to creating a stable cryptocurrency. Thus, the cryptocurrency will become, the “diem USD”. Also, the US Federal Reserve wants to follow the dynamic announced by China. While Xi Jinping has been testing his e-yuan since March, the US Federal Reserve has decided to speed up its thinking on this subject. The president of the American central bank, Jerome Powell, thus affirmed Thursday that the Fed will launch this summer a vast consultation on the digital dollar.

Money Market

This week, three countries were on the financial market of the West African Monetary Union (UMOA). It is firstly Côte d'Ivoire which raised an amount of 59.500 billion FCFA, Burkina Faso raised a sum of 33 billion FCFA at the end of its issue of assimilable treasury bonds (BAT) with a maturity of 182 days and the State of Mali which received an amount of 65 billion FCFA on May 19, 2021.

Stock market

The main indicators of the Regional Stock Exchange (BRVM) had a bearish weekend. The BRVM 10 index fell 5.23% to 127.78 points against 134.83 points the day before. For its part, the BRVM Composite index (the general stock market index) recorded a drop of 3.06% to 149.44 points against 154.16 points previously. As for the market capitalization of the equity market, it recorded a decrease of 141.932 billion FCFA, standing at 4497.304 billion FCFA against 4639.236 billion FCFA the day before. That of the bond market was found, on the other hand, with an increase of 3.575 billion FCFA, standing at 6285.639 billion FCFA against 6282.064 billion FCFA the day before. The total value of the transactions stood at 455.011 million FCFA

BRVM officials have announced that the shareholders of the National Telecommunications Office (ONATEL) of Burkina Faso will receive on June 1, 2021, for the 2020 financial year, an annual net dividend of 27.170 billion FCFA. This amount corresponds to a net dividend per share of 399.563 FCFA.

After five years of decline on the Abidjan Stock Exchange, the value of the Solibra share is picking up. The subsidiary of the French group Castel, listed on the BRVM of Abidjan, is currently continuing its 7th continuous month of growth. It has shown an increase of 14.5% since the beginning of May 2021, according to market data collected by the Ecofin Agency.

In addition, the New York Stock Exchange remains weighed down by inflationary fears. In business news AT&T (-2.7%) confirmed the spinoff of its subsidiary WarnerMedia in the context of a merger with Discovery (-5%) amid increased competition in the world of video streaming .

Raw materials

The recovery in Asian demand and the rise in US crude inventories caused a plunge in oil prices. But the prices are supported by the hope of operators to see increased demand for fuels in the world, particularly after the easing of restrictions imposed to fight against the covid-19 pandemic.

In Togo, the cotton campaign report shows that the 2020-2021 production recorded 66,000 tons of seed cotton against 117,000 tons for the previous campaign. The annual decline is estimated at 43%.

To ensure food security in Burkina Faso, the USAID-funded West Africa Trade & Investment Hub (Trade Hub) granted $1 million to the seed company Neema Agricole du Faso (NAFASO) to boost the production of this basic culture. The grant and private sector partnership with NAFASO will help boost rice production in Burkina Faso. An essential effort to improve food security in the country.

The Coffee-Cocoa Council (CCC) has called on the European Union (EU) to be more flexible in its requirements on sustainable cocoa. The EU, which absorbs more than 65% of its brown gold exports, plans to adopt stricter regulations by the end of this year prohibiting the importation into the Community market of cocoa, in particular from deforestation and child labor. Local authorities believe, however, that it will take time to adapt.

Companies

Unilever Côte d'Ivoire SA, a subsidiary of Unilever Overseas Holdings Limited and specialized in the production and marketing of consumer products (toothpaste, soap, Lipton tea, mayonnaise) has greatly reduced its recent loss. The shareholders' equity of Unilever Côte d'Ivoire showed cumulative losses over several financial years with a loss carried forward of 32.599 billion FCFA and negative shareholders' equity of 21.964 billion FCFA under the last approved accounts. The financial statements as of December 31, 2020 show a sharp drop in turnover of 30% with an achievement which stood at 39.693 billion FCFA against 56.379 billion FCFA in 2019.

Japan Motors, a benchmark company in vehicle distribution, is setting up in Benin. With its new branch, located in the Dandji district, the company offers Beninese the commercial and professional ranges of the Peugeot, Foton and Lassa brands. Peugeot and Japan Motors have joined hands to guarantee the best automotive investment and the best after-sales service, in terms of skills, availability of parts, speed of maintenance.

Banks and Insurance

NSIA Banque Côte d'Ivoire did not have a good year in 2020. Its profit after tax fell by 47.11% compared to the 2019 financial year. The summary financial statements for the 2020 financial year audited but not yet certified by the auditors, reveals that the profit stood at 7.201 billion FCFA against 13.617 billion FCFA in 2019. The regression is therefore estimated at 6.416 billion FCFA, or 47.11%.

Nine months after the start of negotiations, Access Bank Plc has finalized the acquisition of the Mozambican bank, African Banking Corporation. The acquired bank will be merged with subsidiary Access Bank Mozambique SA which is expected to become the seventh largest bank in the country. By the end of 2021, the bank also plans to expand to other African countries such as Angola, Cameroon and Guinea-Conakry.

The African Development Bank (AfDB) and the European Bank for Reconstruction and Development (EBRD) have signed a partnership agreement to develop “new sources of finance” and “unlock investment opportunities” for the private sector and especially African SMEs, with “particular attention” for adaptation to “climate change” by financing “resilient infrastructure”.

The African Export-Import Bank (Afreximbank) announced this week that it has completed its largest-ever operation in the international debt capital markets. This is the bond loan in two tranches carried out on May 10, 2021, subscribed to 1.3 billion dollars. The deal arranged by Hsbc Bank plc gives Afreximbank the ability to tap into long-term, competitively priced resources in Africa and finance investment.

The West African Development Bank (BOAD) grants loan agreements to the Republic of Senegal. This funding takes into account the 2017-2019 periodic maintenance program for paved roads in Senegal and the project to rehabilitate and extend irrigated village perimeters in the Donaye-Diattar, Guede, MBoyo and Podor areas.

Société Générale and local banks granted SCANNING SYSTEMS financing worth 8.4 billion FCFA. This transaction was arranged and structured by Société Générale Group's Sub-Saharan Africa Structured Finance Platform (SFG AFS), which also acted as Facility and Security Agent. This sub-regional project is very strategic for UEMOA and ECOWAS which are the initiators.

Brussels sanctions UBS, UniCredit and Nomura. The three banks were fined a total of 371 million euros for agreeing for several years with five other banks to distort competition on the bond market.

Governance

The members of The Africa Road Builders Selection Committee chose SEM. Muhammadu BUHARI, President of the Federal Republic of Nigeria, Winner of the Grand Builder Super Prize – Babacar NDIAYE Trophy 2021. The Selection Committee notes with satisfaction that despite the health crisis, Nigeria has continued major road and transport works , particularly in rail transport.

Financial crimes

Under scrutiny by the International Monetary Fund (IMF), the Guinean government is stepping up its fight against money laundering. Because the criterion for obtaining new aid is to comply with the conditions of the IMF, of which the fight against money laundering is a part. In early April, the National Assembly unanimously adopted the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) law.

The United Kingdom has returned to the Federal Government of Nigeria a sum of 4.8 million euros seized from the British accounts of a former Nigerian governor of the Delta State (south), an oil-rich region, convicted of corruption by a London court. The sum returned had been embezzled by James Ibori, Governor of Delta State, between 1999 and 2007, according to the judgment of a British court, and had been recovered by financial agencies.

The Nigerian authorities highlight their efforts to fight corruption. Diezani Alison-Madueke, who served as oil minister under President Goodluck Jonathan between 2010 and 2015, is cited in a host of corruption cases. The head of the Economic and Financial Crimes Commission indicated that his services have been able to seize so far 153 million dollars, in addition to 80 properties for a total value of 80 million dollars.

For shortcomings in the system for combating money laundering and the financing of terrorism (LCB-FT), the Prudential Control and Resolution Authority (ACPR) announced that it had issued a reprimand and a sanction against Carrefour Banque payment of 1.5 million euros. The majority of the alerts related to C-Zam, a payment account launched by the bank in 2017 but closed in mid-2020. In total, twelve grievances were reproached by the banking regulator to the subsidiary of Carrefour (60%) and BNP Paribas (40%).

Regional growth

While the International Monetary Fund estimates that the emergency needs for Africa by 2025 amount to some $285 billion, Beninese Minister Romuald Wadagni thinks that "hoping for $100 billion is not wishful thinking ''. According to him, the amount planned to be released under the Dts today is around 650 billion. To achieve this common objective for the countries of the franc zone, it is essential that the rich countries which have these special drawing rights as a priority waive their share and agree to reallocate them to African countries.

It should be noted that Romuald Wadagni participated in a promising way in the debates on the refinancing of African economies. At the invitation of France and on behalf of President Patrice Talon, Romuald Wadagni brilliantly presented Benin's position on the recovery of African economies after Covid-19. Since December 2020, high-level meetings have been organized between Romuald Wadagni and personalities like Tidjane Thiam, Ousmane Diagana, Vice-President for West and Central Africa of the World Bank Group. These meetings made it possible to work on the theme: Improving the attractiveness of African economies and strengthening the private sector.

The Regional Mortgage Refinancing Fund of UEMOA (CRRH-UEMOA), organized by videoconference, a second training workshop on “the environmental and social risk of housing loans in UEMOA”. The objective is to consolidate the achievements of the first workshop on best practices for managing the environmental and social risks of housing loans in each country of the Union for housing finance.

The Conference of Bars of the West African Economic and Monetary Union (UEMOA) held a meeting in Lomé, the objective of which is to further harmonize the rules of ethics and the internal regulations governing the bars, in order to have a common legislation within the space. On the menu, the ethical rules, the common projects to preserve the interests acquired within the framework of a better integration of the bars and the renewal of the executive bureau of the Conference elected in Ouagadougou in 2018, whose mandate has come to an end.