Hello. Welcome to the weekly economic index by Ventures Africa. Here’s a rundown of the three biggest stories of the week (November 21st-27th).

The naira just got more interesting

On Tuesday, the Central Bank of Nigeria (CBN) announced a surprise reveal of the new naira notes. According to Godwin Emefiele, the CBN was no longer waiting till its initially proposed unveiling date of December 15th. So it made the reveal on Wednesday, November 23rd. 

Many criticized the looks of the new naira, so much so that a #NairaRedesignChallenge started on social media.

But on Tuesday, the CBN made another profound announcement that somehow went under the radar. It raised interest rates by 100 basis points to 16.5%, the highest since 2001. That was the CBN’s fourth consecutive rate hike this year. So saving in naira just became more profitable than ever.

Nigerian students won’t be a-loan for long

On Wednesday, Nigerian lawmakers passed a student loan bill to provide interest-free tuition loans to university students.

The bill aims to increase access to tertiary (post-secondary) education in Nigeria. One significant provision of the bill is the establishment of the Nigerian Education Bank, which will oversee the disbursement of loans to qualified students through universities.

The House of Representatives passed the bill earlier this year and sent it to the Senate for approval. Now that the Senate agrees, Nigerian students are one presidential signature away from accessing loans.

University education in Nigeria is relatively cheap since the government subsidizes it. However, many Nigerians still can’t access it, as they live in multidimensional poverty. Student loans will give them a lifeline, allowing them to attend university and repay when they find jobs after graduation.

But seeing Nigeria’s outrageous youth employment rate (37.2% of people aged 25-34 are unemployed), it’s hard not to worry about the bill’s potential to succeed.

Ghana has a ‘golden’ strategy

Ghana’s government plans to go back to a barter system of trade. On Thursday, Ghana’s government said it was working on a new policy to buy oil products with gold rather than US dollar reserves.

Ghana is Africa’s leading gold producer. In 2021, it produced 117.6 tons of gold, making it the world’s sixth-largest producer of this precious metal. But at the same time, it has relied on imports for refined oil products since its only refinery shut down after an explosion in 2017. Now, Ghana seeks to solve an oil deficiency with its gold abundance.

The country is exploring this option because its foreign currency reserves are dwindling while demand for the dollar among oil importers has been rising. At the end of September, Ghana’s Gross International Reserves stood at around $6.6 billion, equating to less than three months of imports cover. As of the end of last year, it had $9.7 billion, according to the government.

More so, this strategy aims to slow down the decline of the cedi, which recently ranked as the continent’s worst-performing currency. The depleting foreign reserves and declining cedi expose Ghana to risks of debt distress. So it needs an urgent solution, and gold might be the answer.

ICYMI: Market Roundup

• The NGX All-Share Index gained 6.88% (3,061.61 points) last week to close at 47,554.34 points. Nigeria’s stock market cap stands at N25.902 trillion. Top Gainers were Nigerian Breweries (+18.67%), Sovereign Trust Insurance (+16.67%), Prestige Assurance (+16.22%), Cornerstone Insurance (+15.91%) and Airtel Africa (+14.17%).
  Top decliners were Nestle Nigeria (-20.67%), Capital Hotel (-10.00%), SCOA Nig. (-9.30%), CWG (-9.09%), Royal Exchange (-8.97%).
• The naira fell to N446.33/$ at the Investors’ and Exporters’ window from the previous week’s N442.66/$.
• Brent crude fell to $83.63/barrel at the end of the week from $87.74, while the U.S West Texas Intermediate (WTI) crude slid to $76.28 from $80.11.
• The cryptocurrency market cap stands at $840.31 billion after a flat trading week. Bitcoin trades at $16,536 (-0.58%), Ethereum trades $1,212 (+0.28%) and Binance Coin (BNB) trades at $313 (+15.19%).

• DeveloPPP Ventures has launched a $102,000 funding grant for startups in Kenya and Tanzania.

• Revio, a South African fintech API startup, raised $1.1 million in seed round led by  SpeedInvest, RaliCap, The Fund, Two Culture Capital, and a few angel investors.
• Goodwell Investments has launched its $154 million uMunthu II fund to finance small and medium-sized businesses that improve the access and affordability of basic goods and services for unserved and underserved consumers in Africa.
• Djamo, an Ivorian fintech startup, has raised $14 million in funding from Enza Capital, Oikocredit, Partech Africa, and other investors.
•  Pivo, a Nigerian fintech, closed a $2 million seed round from Precursor Ventures, Vested World, Y Combinator, FoundersX, and Mercy Corp Ventures.