Daily Watch – Nigeria palm oil imports surge 353%, Cameroon & Congo tie up railway project

Nigeria’s palm oil imports from Malaysia, a top global producer, have surged by 353 percent in the first four months of 2023 despite local players ramping up production, data from the Malaysian Palm Oil Council shows. The country’s palm oil import from Malaysia increased to 92,961 metric tons (MT) between January-April 2023, from 20,513 MT in the corresponding period of 2022. This indicated a 72,448 MT increase. In 2022, the country imported 227,035 MT of palm oil from Malaysia. Despite moves by the government in listing crude palm oil alongside other 40 items restricted from forex access and closing the Nigerian borders, oil palm imports into the country are still on the rise owing to the huge demand-supply gap.

Nigeria’s central bank allowed the naira to drop about 2% on the official market to a record low on Wednesday, but the currency’s rate remained above where it trades at central bank auctions and on the black market. Nigeria is trying to find a way to unify its multiple exchange rate system used to keep the naira artificially strong. New President Bola Tinubu told members of his governing party last week that the country would not have multiple exchange rates anymore. The naira fell as low as ₦475 to the US dollar from Tuesday’s trades of around ₦465, before recovering to ₦466. Traders said the central bank had allowed them to trade the currency as weak as ₦475 to the dollar on the official market outside a previous band of ₦460 to ₦467 to the dollar. In the past, the bank has allowed the naira to weaken in  ₦5 increments. The central bank has been adjusting the naira gradually on the official market to avoid a large-scale devaluation.

The World Bank has maintained its 1.6% Gross Domestic Product (GDP) growth forecast for Ghana in 2023, far lower than the expected 3.2% for Sub-Saharan Africa. This places it in the 42nd position in Sub-Saharan Africa. The International Monetary Fund also projected a 1.6% growth rate for Ghana in 2023. According to its June 2023 Global Economic Prospects Report, Ghana’s economy is however projected to expand by 2.9% in 2024. The report stated that the slowdown in the economy is due to the challenges facing the economy, as the Ghana government is undertaking an International Monetary Fund support programme. Five African countries, Malawi (1.4%), Sudan (0.4%), South Africa (0.3%), South Sudan (-0.4%) and Equatorial Guinea (-3.7%) are expected to grow lower than Ghana in 2023.

Cameroon will begin construction in August of a railway line connecting its coast to a large iron ore deposit straddling its border with the Republic of Congo, the interim mines minister said. The central African country signed a deal with two China-linked companies in June 2021 to construct the railway, despite facing legal action from Australia’s Sundance Resources. Sundance has filed for international arbitration and billions of dollars in damages, saying Cameroon and Congo violated contracts by developing the Mbalam-Nabeba project with Chinese investors. Construction for the railway linking the deposit in Nabeba to Cameroon’s southern port town of Kribi is set to begin at the end of August in the town of Ntam, Cameroon’s interim Mines Minister, Fuh Calistus Gentry, said late on Tuesday, after a meeting with mining officials in Congo.