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Shifting Sands of Consumer Sentiment Across West Africa



  • Ghana’s consumer confidence declines by five points
  • Improved perception of Nigerian finances, job prospects & spending intentions

Ghana’s latest Consumer Confidence Index (CCI) for the fourth quarter of 2018 shows a five point decrease to 108, while Nigeria’s CCI has dropped one point to 117, presenting a diverse picture of
consumer sentiment across West Africa.

In terms of Nigeria’s performance, Nielsen Nigeria MD Ged Nooy comments; “In Q4’18, the consumer outlook in Nigeria dipped marginally versus the previous quarter. Continued inflationary pressures and uncertainties around the elections could have impacted consumer sentiment, leading to a one-point drop in the consumer confidence index. However, despite the drop, consumers showed increased propensity towards stocking up on the necessities as a result of year-end festivities.”

When it comes to job prospects, 62% Nigerians view their prospects as excellent or good (a 6 point increase from the previous quarter) and 31% view them as not so good or bad. In terms of the state of their personal finances over the next 12 months, the same amount as the previous quarter (79%) say excellent or good. In addition, the number of Nigerian consumers who feel now is a good or excellent time to purchase what they need or want has increased three points to 46%.

Looking at whether Nigerians have spare cash, exactly half (50%) say yes, down five points from the previous quarter. In terms of what their spending priorities are once they meet their essential living expenses, the highest number of consumers (73%) would put their spare cash into savings, followed by 71% on home improvements and 68% who would invest in stocks and mutual funds.

Ghanaians less positive

While Nigeria showed a slight decline in confidence; Ghana’s CCI figure dropped a substantial five points to 108. Commenting on the reasons for this Nielsen Market Lead for West Africa Emerging Markets Yannick Nkembe says; “The continued depreciation of the Cedi, the collapse of certain banks leading to job losses, and the high cost of credit and an inability to access credit have led to a drop in consumer sentiment in Ghana”.

This decline in sentiment is clearly reflected in Ghanaian consumers’ immediate-spending intentions. Only 40% Ghanaians say now is a good or excellent time to purchase what they want or need, a substantial eight-point drop compared to the previous quarter. Negative sentiment is also reflected in Ghanaian’s job prospects. Only 58% Ghanaians view their job prospects as excellent or good, experiencing a six-point drop compared to the previous quarter.

Sentiment around the state of personal finances has also taken a slight hit with Ghanaians who think the state of their personal finances would be excellent or good over the next year having dropped nine points from the previous quarter to 67%. This in comparison to 31% who think that the state of their personal finances is not so good or bad, which represents a substantial 13% increase in this negative sentiment.

Looking at whether Ghanaians have spare cash to spend, 42% said yes, versus 53% in the previous quarter. In terms of their spending priorities once they meet their essential living expenses, the highest number of consumers (77%) would put their spare cash into savings and the same number will spend on home improvements, while 70% said they would invest in shares/mutual funds.

Elaborating on these results, Nkembe says; “Consumer confidence in West Africa declined in the last quarter of 2018. However, it still falls on the positive side of the spectrum and we hope to see a rebound in confidence levels in 2019.”

The Nielsen Consumer Confidence and Spending Intentions survey was conducted on 15-16 Nov’18 in Kenya, Ghana, and Nigeria among 1 500 respondents, using mobile methodology. The sample has quotas based on age and gender for each country.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.

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Crude Oil

Oil Holds Near Highest Since 2018 With Global Markets Tightening



Crude Oil - Investors King

Oil held steady near the highest close since 2018, with the global energy crunch set to increase demand for crude as stockpiles fall from the U.S. to China.

Futures in London headed for a third weekly gain. Global onshore crude stocks sank by almost 21 million barrels last week, led by China, according to data analytics firm Kayrros, while U.S. inventories are near a three-year low. The surge in natural gas prices is expected to force some consumers to switch to oil, tightening the market further ahead of the northern hemisphere winter.

China on Friday sold oil to Hengli Petrochemical Co. and a unit of PetroChina Co. in the first auction of crude from its strategic reserves said traders with the knowledge of the matter. Grades sold included Oman, Upper Zakum and Forties.

Oil has rallied recently after a period of Covid-induced demand uncertainty, with some of the world’s largest traders and banks predicting prices may climb further amid the energy crisis. Global crude consumption could rise by an additional 370,000 barrels a day if natural gas costs stay high, according to the Organization of Petroleum Exporting Countries.

“Underpinning the latest bout of price strength is a tightening supply backdrop,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd.

Various underlying oil market gauges are also pointing to a strengthening market. The key spread between Brent futures for December and a year later is near $7, the strongest since 2019. That’s a sign traders are positive about the market outlook.

At the same time, the premium options traders are paying for bearish put options is the smallest since January 2020, another indication that traders are less concerned about a pullback in prices.

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Unlocking Investments into Africa’s Renewable Energy Market



green energy - Investors King

The African Energy Guarantee Facility (AEGF) is launching a virtual roadshow of free webinars allowing a deeper understanding of risk issues for renewable energy projects on the continent, and conversations around risk mitigation solutions. The first webinar will take place on Thursday, 23 September from 14:30-16:00 hrs. EAT. 

The session will be oriented on how to get more energy projects from the drawing board to the grid. While the energy demand in African economies is expected to nearly double by 2040, and although the potential for renewable energy is 1,000 times larger than the demand, only 2GW out of almost 180GW of this new renewable power were added on the African continent.

Clearly not good enough! To improve the situation within the next two decades, new solutions need to be implemented urgently. De-risking and promoting private sector investments will play a crucial part of it.

In this 90-min interactive session, AEGF partners: the European Investment Bank (EIB), KfW Development Bank, Munich Re and the African Trade Insurance Agency (ATI) will share their experience and provide valuable insights on how they were able to come together and design practical solutions for investors and financiers of green energy projects in Africa aligned with SDG7 objectives.

Across Africa, the complexity of renewable energy projects and their long tenors hold back crucial energy investment. Tailored to the specific needs and risk profiles of sustain­able energy projects, AEGF will tackle the investment challenge by providing underwriting expertise and capacity tailored to market needs.

The AEGF will significantly boost private investment in sustainable energy projects, both expanding access to clean energy and contribute to achieving UN Sustainable Development Goals. The scheme supports new private sector investment in eligible renewable energy, energy efficiency and energy access projects in sub-Saharan Africa.

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Shell Signs Agreement To Sell Permian Interest For $9.5B to ConocoPhillips



Shell profit drops 44 percent

Shell Enterprises LLC, a subsidiary of Royal Dutch Shell plc, has reached an agreement for the sale of its Permian business to ConocoPhillips, a leading shales developer in the basin, for $9.5 billion in cash. The transaction will transfer all of Shell’s interest in the Permian to ConocoPhillips, subject to regulatory approvals.

“After reviewing multiple strategies and portfolio options for our Permian assets, this transaction with ConocoPhillips emerged as a very compelling value proposition,” said Wael Sawan, Upstream Director. “This decision once again reflects our focus on value over volumes as well as disciplined stewardship of capital. This transaction, made possible by the Permian team’s outstanding operational performance, provides excellent value to our shareholders through accelerating cash delivery and additional distributions.”

Shell’s Upstream business plays a critical role in the Powering Progress strategy through a more focused, competitive and resilient portfolio that provides the energy the world needs today whilst funding shareholder distributions as well as the energy transition.

The cash proceeds from this transaction will be used to fund $7 billion in additional shareholder distributions after closing, with the remainder used for further strengthening of the balance sheet. These distributions will be in addition to our shareholder distributions in the range of 20-30 percent of cash flow from operations. The effective date of the transaction is July 1, 2021 with closing expected in Q4 2021.

Shell has been providing energy to U.S. customers for more than 100 years and plans to remain an energy leader in the country for decades to come.

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