Investors Update: Angola inflation hits 4-month high as fuel subsidies end

Angola inflation hits 4-month high as fuel subsidies end

Highlights

• Angola’s inflation rate climbed to a four-month high in June after a government decision to stop defending the kwanza and cut gasoline subsidies.
• The annual inflation rate in Africa’s third-biggest oil producer rose to 11.25% in June from 10.6% in the previous month, data from the National Statistics Institute show. 
• That’s the second consecutive increase after 15 months of declines. Contributing to the increase were higher costs of food and transport, according to the statistics institute.

Source: Bloomberg

Our Takeaway

Similar to its fellow oil producer, Nigeria, Angola’s central bank governor was in June replaced, its treasury abstained from dollar sales in April and May, accelerating the depreciation of the official currency—kwanza—to 39% since then while the government also scrapped subsidies for gasoline, which almost doubled pump prices (triple in Nigeria). In both African economies, we expect weaker currencies to be one of the main drivers of upward pressure on inflation given a reliance on imported food.

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Vodafone inks deal to boost streaming for Africans

Highlights

• Qwilt and Cisco will deploy their content delivery network (CDN) solution to Vodafone, increasing the quality and capacity of the telco’s streaming delivery to its mobile and fixed broadband customers across Europe and Africa.
• Following a successful trial in Italy, Vodafone will initially start deploying the service in seven countries, embedding the solution at the edge of its networks, closer to customers, so that they can receive highly responsive and quality streaming services. 
• This model will allow Vodafone to expand the solution and business opportunities to other content and application owners, and they in turn gain access to the millions of customers using Vodafone’s networks.

Source: ABC

Our Takeaway

The three-way, Vodafone partnership comes at a time when Africa is approaching an inflection point in terms of broadband connectivity and affordability, which means more people are likely to be open to streaming entertainment content. The continent is increasingly becoming an important growth area for streaming services, which explains why tech giants like Amazon and Netflix as well as regional players like Multichoice are launching an offensive push to capture the region’s on-demand streaming subscribers, projected to reach 15 million by 2026.

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Namibia imposes tax on cryptos and other digital assets

Highlights

• Namibia has imposed a tax on digital assets, cryptocurrencies, and virtual asset service providers (VASPs) as more countries move to regulate and benefit from these new financial instruments.
• The decision is a reflection of the broad recommendations made by the African Union to foster the burgeoning African digital asset industry. 
• In November, the Bank of Namibia (BoN) announced that digital currencies such as Bitcoin could be used as forms of payment.

Source: Nairametrics

Our Takeaway

Namibia’s crypto tax underscores a growing trend across Africa, where governments are waking up to the potential economic value presented by cryptocurrencies and digital assets. In light of the remarkable growth of the digital asset space, many African countries are not only acknowledging their significance but are now also seeking ways to regulate and leverage these new financial instruments to boost state coffers. Notably, Nigeria, Africa’s most populous country, recently updated its finance act to include a 10% tax on cryptocurrencies.