Foreign exchange market

Currencies are showing an astonishing general status quo. The Forex chart shows that no spread exceeds 0.1% on major currency pairs. While the dollar is recovering from its lows, the yen and the Swiss franc have rallied following the decline in the stock markets. EUR/USD initially hit a new 1.5 month high. USD/JPY fell to a month-and-a-half low and weakness in equities sparked safe-haven demand for the yen. The dollar Swiss franc has recorded a downward wave since the beginning of the month which saw it break a support at 0.9208.

Moreover, the Guinean currency is still struggling to hold up against the main foreign currencies such as the Euro, the dollar and the FCFA.

Cryptocurrency

Facebook's cryptocurrency project announced since 2019 will be effective by the end of 2021. CNBC reports this week, indicating that the association Diem (formerly called Libra), which manages the project, plans to begin by testing a stable cryptocurrency backed by the US dollar this year. Diem is discussing with Swiss regulators to obtain a payment license, which would represent a major step forward for the launch.

But concerns about cryptocurrencies are growing. Five years ago, the perception was that bitcoin was just a fringe phenomenon with no impact on financial stability. Now that bitcoin can be worth $50,000 and there are 21 million bitcoins, it becomes a market of over $1 trillion. Economists fear a risk of financial instability.

Money Market

The General Directorate of Public Accounting and Treasury of Senegal raised an amount of 55 billion FCFA on the financial market of the West African Monetary Union (UMOA). This was at the end of its issuance of Treasury bonds (ORD) with 5-year and 10-year maturities organized in partnership with the Agence UMOA-Titres based in Dakar. The operation resulted in 215.014 billion FCFA of overall bids from investors while the amount auctioned by the issuer was only 50 billion FCFA.

Through its Directorate General of Treasury and Public Accounting, the State of Burkina Faso raised on April 28, 2021 on the financial market of the West African Monetary Union (UMOA) an amount of 66 billion FCFA (99 million euros). The securities issued will be redeemed on the first business day following the maturity date set at April 29, 2024 for ODRs with a 3-year maturity. Regarding the payment of interest, it will be made from the end of the first year at a fixed interest rate of 5.55%. As for ODRs with a 5-year maturity, their redemption will also take place on the first business day following the maturity date set at April 29, 2026.

Côte d'Ivoire was also on the financial market this week. At the end of its simultaneous issue of bonds and recovery bonds (ORD) from the Treasury with a maturity of 91 days and 3 years, the country won 66 billion FCFA. The UMOA-Titres agency listed 157.200 billion FCFA in overall bids from investors while the issuer had auctioned an amount of 60 billion FCFA. This gives a coverage rate of the amount auctioned of 262%.

Stock market

The Director General of the Regional Stock Exchange (BRVM), Edoh Kossi AMENOUNVE, announced in an interview with Jeune Afrique that despite the health context, the West African stock market recorded record emissions. The BRVM recorded in 2020 more than 246 billion CFA francs in transactions. The institution has listed 28 bond lines for a total of around CFAF 2,000 billion.

Bloomfield Investment reported that BRVM performance indicators ended the week of April 19-23, 2021 with record highs. The agency noted 130.33 points for the BRVM 10 index (+1.50%) and 148.21 points for the BRVM Composite index (+2.70%). The market capitalization of the equity market stands at 4,455 billion CFA francs.

Transactions in equity market value amounted to 3,165 million CFA francs at the end of the week, driven mainly by the "Public Services" (60%), "Finances" (25%) and "Industry" (12%) sectors. %). The SMB CI share recorded the largest increase in the market with a gain of 42.90%, while the SETAO CI share posted the largest drop with a fall of 6.67%.

Raw materials

According to the Department of Energy, domestic oil inventories have increased slightly. Gasoline reserves also increased by 0.1 mb, while stocks of distilled products fell by 3.3 mbd compared to the previous week, against an expected drop of 1.2 mb.

The Private Sector Guarantee Fund (FGSP-sa) and actors in the cotton sector in Mali have signed a framework collaboration agreement. A total of 8,000 cooperatives will be supported financially.

An agreement, for an amount of 40 million euros or 26.2 billion CFA Francs, was signed between Côte d'Ivoire and the French Development Agency as part of the financing of the RESCO project. Thus, regional centers for motorized agricultural services will soon be made available to cotton growers in the Ivorian cotton basin in order to boost cotton production. This new project will directly benefit more than 120,000 farms and, beyond that, all players in the sector.

As part of its pro-cashew project, the American NGO, Development gateway, organized a workshop for actors in the cashew sector in order to overcome the problems of competitiveness in West Africa. The pro-cashew project takes place in five African countries which are Côte d'Ivoire, Ghana, Burkina Faso, Benin and Nigeria. It is funded by the United States Department of Agriculture (Usda).

Banks and Insurance

The Central Bank of West African States (Bceao) has published a press release on its official website which "formally" denies the rumors reporting the introduction on the money market of a new denomination of 50,000 CFA francs. Reserving the right to take legal action against the authors and accomplices of the false rumours, the banking institution specifies that it has not made any changes to the current range of banknotes of its issue in circulation which remain valid.

Ecobank Group reported results of its operations for the fiscal year 2021. Its revenue rose 4% to $409 million and pre-tax profit $100 million, an increase of 11% year-on-year. Earnings per share increased 8% and return on tangible equity was 15.7%. Revenue increased by 13% in Commercial Banking.

Minister of Development Cooperation Meryame Kitir announced in a statement that the Council of Ministers has approved a draft law approving Belgium's subscription to the 7th general capital increase of the African Development Bank (AfDB). ). The draft general expenditure budget for the 2021 budget year provides for a commitment amount of 38,450,000 euros for this capital increase, i.e. 4,807,000 euros per year during the 2021-2028 period, specifies the minister.

Weekly liquidity injection operations in the banking system, carried out by the Bank of Central African States (Beac) amounted to CFAF 1,213 billion in banks in March 2021. These funds were made available credit institutions from this community space to six States (Cameroon, Central African Republic, Congo, Gabon, Equatorial Guinea and Chad) during the month of March 2021.

The Bank of Africa Group presented the results as of December 31, 2020 of its 6 subsidiaries listed on the Regional Stock Exchange (BRVM) of Abidjan. The bank now has more than 6,000 employees, as of December 31, 2020, it had a consolidated balance sheet total of 8.7 billion euros and recorded a consolidated net profit of 102.7 million euros on that date.

For its part, Oragroup posted a net result of 2,664 billion CFA francs as of March 31, 2021, an increase of 314%. A result obtained thanks to its strategy of supporting the economy with a 10% increase in outstanding loans and an inflow of customer resources of more than 446 billion compared to the situation on March 31, 2020. The financial institution is showing good performance.

Governance

The Ministry of Economy and Finance announced that Standard and Poor's reaffirms Benin's B+ rating for its stability and resilience. This decision once again attests to the resilience of the country's economic fundamentals, which had led the agency to maintain Benin's rating in June and October 2020, despite the Covid-19 crisis. Standard & Poor's hailed the ambitious reforms implemented as part of the Government's Action Program, and the quality of the authorities' management of the Covid-19 crisis.

Also in Benin, the Court of Auditors is operational, 17 months after its creation. In the Council of Ministers, the Head of State announced the appointment of Ismath Bio Tchané wife Mamadou to lead the structure. Previously confined within the Supreme Court, the Audit Bench is changing its name, taking on a new status and can now emancipate itself. The creation of the Court of Auditors in the countries of the West African Economic and Monetary Union (UEMOA) provides that this jurisdiction must offer "the guarantees of transparency and independence required" in order to "ensure the reliability of the data necessary for the organization of the multilateral surveillance of budgetary policies”.

Financial crimes

The technical commission of the Inter-State Group for the fight against money laundering and the financing of terrorism in West Africa (GIABA) held its extraordinary plenary since last Friday in Saly-Portudal. Chaired by the Director General of GIABA, the Togolese Kimelabalou Aba, the ceremony aims to assess the level of commitment and the progress made by the countries that have been evaluated, namely Burkina Faso, Cape Verde, Ghana and Senegal in 2016, 2017 and 2018.

An investigation by the Integrity and Anti-Corruption Office (PIAC) of the African Development Bank (AfDB) has established that Maxicare Company engaged in collusive and fraudulent practices during a call for tenders for the construction of weigh stations and supply of equipment under the Bamenda-Mamfe-Abakaliki-Enugu Road Corridor Transport Facilitation Program linking Cameroon and Nigeria. The company and its subsidiaries have been sanctioned and will be ineligible for projects financed by the AfDB Group for a period of 36 months, effective from February 23, 2021.

The Human Rights Watch (HRW) report pinpoints four countries including Cameron on “low transparency for Covid-19 emergency loans”. Human Rights Watch and Transparency International said Cameroon released almost no information of its Covid-19 spending, to secure a second IMF loan. The government has published information about the contracts (but not the contracts themselves), including beneficial ownership information.

Regional growth

The Commission of the West African Economic and Monetary Union (UEMOA) has published its report on the implementation of community reforms. The document reveals that the rate of execution of these reforms increased from 74% in 2019 to 76% in 2020. In total, 116 texts and 84 community programs and projects were reviewed. The report also covered eighty-four (84) UEMOA programs and projects in execution in the eight Member States for a total amount of 316 billion financed by the UEMOA Commission.