Here are three big stories from Africa’s business and policy landscape you (probably) didn’t miss but should keep in mind this week:

Nigeria’s inflation hits new high in June

Nigeria’s battle with inflation continues, with the latest data revealing a troubling new peak. Official figures released on Monday show the inflation rate reached a staggering 34.19% year-on-year in June. This marks the 19th consecutive month of rising inflation in Africa’s most populous nation, surpassing the previous high recorded in May (33.95%). This news comes just ahead of a critical decision by the Central Bank of Nigeria (CBN) scheduled for July 23rd when the CBN will announce its latest interest rate decision.

The current economic turmoil stems partly from recent government policies enacted by President Bola Tinubu. These include slashing subsidies on petrol and electricity, coupled with a double devaluation of the naira within a year. These reforms have had a devastating impact on the nation’s poorest citizens, pushing millions deeper into a cost-of-living crisis unlike any seen in recent decades. Labor unions recently met with President Tinubu to advocate for a new minimum wage after suspending an indefinite strike last month.

Data from the National Bureau of Statistics also highlights the concerning trend. Food and non-alcoholic beverages continue to be the primary culprit for inflation, with food inflation rising to 40.87% in June compared to 40.66% the previous month. The Central Bank of Nigeria, under the leadership of Governor Olayemi Cardoso, has reiterated its commitment to curbing inflation. At their last policy meeting in May, the CBN raised its key lending rate by 150 basis points to 26.25%. All eyes are now on the upcoming July 23rd decision to see if further action will be taken

South Africa cracks down on misleading financial influencers

The Financial Sector Conduct Authority (FSCA) of South Africa is tightening its grip on social media activity related to financial advice. In their annual regulatory report, the FSCA outlined concerns about the rise of misleading content from financial influencers, and its potential to harm consumers. While acknowledging the positive role some of these financial influencers play in promoting financial literacy and market participation, the FSCA highlighted the growing threat of misinformation and scams. The report specifically mentioned shady high-yield investment schemes, often promoted by celebrities on platforms like TikTok, as a key area of concern. “We urge consumers to seek financial advice from authorized professionals,” the FSCA advised. “Social media influencers should not be your primary source of trusted financial guidance.”

Beyond misleading content, the FSCA is also grappling with the emergence of deepfake scams. These scams utilize artificial intelligence to create convincing video forgeries where public figures appear to endorse fraudulent schemes. This makes it increasingly difficult for consumers to distinguish genuine content from these deepfakes. Adding another layer of complexity, fraudsters are impersonating legitimate financial service providers and even the FSCA itself. The FSCA urges caution and advises consumers to verify any investment or trading services directly with their office before proceeding. The report also exposed the tactics scammers employ on social media platforms like Telegram and WhatsApp. These platforms are used to lure victims with unrealistic promises of high returns and fabricated positive reviews. In some cases, scammers utilize “mule accounts” at banks and cryptocurrency exchanges to further obfuscate their activities and avoid detection. The FSCA remains committed to safeguarding financial consumers from such malicious practices. They emphasize continuous updates to their enforcement methods to stay ahead of the ever-evolving tactics of digital fraudsters.

Dangote refinery announces reduced stake for NNPC

The Dangote Refinery, Africa’s largest oil refinery, has seen a shift in ownership structure. According to a press release by the CEO of Dangote Group, Aliko Dangote, the Nigerian National Petroleum Corporation (NNPC) Limited’s stake in the refinery has been reduced to 7.2%.

This comes after NNPC failed to meet its financial obligations for a previously agreed-upon 20% stake. The balance payment, due in June, remained unpaid, prompting the adjustment in ownership, according to Dangote. In 2021, NNPC planned to secure a $2.76 billion credit facility to acquire the 20% stake. However, their 2022 audited financial report reflects only a $1.3 billion loan for the purpose. This falls short of the required amount, resulting in a reduced ownership percentage.

“NNPC no longer owns a 20% stake in the Dangote refinery,” Dangote stated. “They were meant to pay their balance in June, but have yet to fulfill the obligations. Now, they only own a 7.2% stake in the refinery.” Despite the ownership change, the Dangote Refinery continues to ramp up production. After years of anticipation, the $20 billion facility began producing diesel and aviation fuel in January 2024. Currently, they are scaling up the production of gasoline (PMS), with market availability expected by August.

ICYMI: Market roundup

• Nigeria’s equities market depreciated by 0.35% over a 5-day trading week, with the NGX All-Share Index closing at 99,671,28 points. The top gainers were Livestock Feeds Plc. (27.03%), Associated Bus Company Plc. (20.31%), Eterna Plc (18.42%), Vitafoam Nigeria Plc (17.78%), and Caverton Offshore Support Grp Plc (17.04%). The top decliners were Africa Prudential Plc (-17.78%), Thomas Wyatt Nig. Plc (-10.00%), P Z Cussons Nig Plc (-10.00%), CWG Plc, (-9.80%), and Tantalizers Plc. (-9.62%).
• The naira closed the week at ₦1563.80/$1 on Friday at the investor’s and Exporters’ window.
• Brent crude closed last week at $85.25. At the same time, the US West Texas Intermediate (WTI) crude closed at $82.21.
• The global cryptocurrency market cap stood at $ 2.3 trillion, as of 8 am Monday, the 7th of July. Bitcoin stood at $63.058,34, a 13.27%, increase over the week, Ethereum increased by 15.28% to trade at $3,364.50, and Binance coin also reduced by 12.18% over 7 days, to trade at $561.62.
• Last week, Nala, a remittance startup now widening its portfolio through a new B2B payments platform, raised $40 million in equity in one of the largest Series A transactions in Africa.
• While, BasiGo Rwanda was awarded a $225 K recoverable grant from Ireme Invest, the Rwanda Green Fund‘s green investment facility.