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Global Macro Highlights

US Postpones 50% EU Tariff to July 9, Signalling a Strategic Pause for Trade Talks

During the week, the US administration announced a postponement of the planned 50.0% tariff on European Union goods, shifting the implementation date from June 1 to July 9. This move follows recent discussions between U.S. and EU officials aimed at de-escalating trade tensions. The latest development follows a series of tariff adjustments that began with a 20.0% levy announced in April 2025, subsequently reduced to 10.0%, before escalating into a renewed threat of a 50.0% tariff effective June 1. The shift in timeline suggests a strategic pause to allow room for further dialogue and potential compromise.

South Africa’s SARB Cuts Interest Rate to 7.3% Amid Disinflation but Lowers 2025 Growth Forecast

South African Reserves Bank cut its benchmark interest rate by 25bps to 7.3%, marking the third consecutive rate cut since September 2024. The decision follows two consecutive months of disinflation, with headline inflation figure at 2.8% in April, below the SARB’s target range of 3.0% to 6.0%. Despite the monetary easing, the SARB revised its 2025 GDP growth forecast downward from 1.7% to 1.2%, citing structural challenges such as high unemployment, energy supply issues, and the need for reforms in sectors like energy, transport, and water.

World Bank Lowers Kenya’s 2025 Growth Forecast to 4.5% Amid Rising Debt and Credit Challenges

The World Bank revised Kenya’s 2025 economic growth forecast downward to 4.5% from 5.0%, citing concerns over rising public debt levels, high lending environment, and a contraction in private sector credit. Kenya has become increasingly reliant on domestic borrowing to finance its budget, amid constrained access to external funding sources as public debt reached 65.5% of GDP. Also, despite stable inflation and exchange rates, lending rates have remained high, exacerbating challenges for the private sector. This is evidenced with the contraction in the private sector in Q4:2024 by 1.4% YoY, compared to a 13.9% YoY expansion in the previous period.

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Domestic Events

Nigeria Launches National Credit Guarantee Company to Boost MSME Financing

The Federal Government of Nigeria has approved the formation of the National Credit Guarantee Company (NCGC), which is set to begin full operations in July 2025. The company will launch with an initial capital of NGN100.0bn, provided by a consortium that includes the Ministry of Finance Incorporated (MOFI), the Nigeria Sovereign Investment Authority (NSIA), Managing Director of Bank of Industry (BOI) and the Managing Director of the Nigerian Consumer Credit Corporation (CrediCorp). This institution aims to make lending safer and enhance access to finance for Micro, Small, and Medium Enterprises (MSMEs). It will also cater to small corporates, manufacturers, consumers, and large businesses across Nigeria.

Nigeria’s National Assembly Proposes $24bn Structured External Borrowing Plan

The National Assembly proposed a new USD24bn external borrowing plan. The proposed Debt Rolling Plan is designed to offer a comprehensive and structured framework for external borrowing by federal, state, and local governments over a two-year period. Anchored on the Medium-Term Economic Framework (MTEF), the plan aims to enhance financial planning efficiency and reduce reliance on ad hoc or reactive borrowing strategies by promoting a more coordinated, long-term funding approach to drive investments in critical sectors such as infrastructure, power, agriculture, and security. A significant portion of the proposed funding is expected to come from Nigeria’s development partners, including the World Bank, African Development Bank, French Development Agency, European Investment Bank, JICA, China EximBank, and the Islamic Development Bank.

Moody’s Upgrades Nigeria’s Foreign-Currency Rating, Signaling Confidence in Economic Reforms

Moody’s Investors Service has upgraded Nigeria’s long-term foreign-currency issuer rating from Caa1 to B3, reflecting significant improvements in the country’s fiscal and external positions. The outlook has been revised from “stable” to “positive,” indicating confidence in the sustainability of recent reforms. Key drivers behind the upgrade include foreign exchange reforms, removal of fuel subsidies, and monetary policy credibility.

CBN Launches New Instruments to Strengthen Non-Interest Financial Market Framework

Also, the Central Bank of Nigeria (CBN) unveiled three new liquidity management instruments: the Nigerian Non-Interest Financial Institutions’ Master Repurchase Agreement (NNMRA), the Central Bank of Nigeria Non-Interest Asset-Backed Securities (CNi-ABS), and the CBN non-interest note (CNIN). The NNMRA aims to standardize and regulate repurchase (repo) transactions within the non-interest banking sector by providing a comprehensive framework that defines the roles and obligations of all counterparties, including the CBN. CNi-ABS, on the other hand, is an asset-backed instrument designed to support the CBN’s goal of building a diversified and resilient non-interest financial market.

Total Energies Divests Stake in OML18, Boosting Shell’s Offshore Nigeria Presence

In the corporate scene, TotalEnergies has signed an agreement to divest its 12.5% non-operated stake in the OML18 Production Sharing Contract (PSC), which includes the Bonga field offshore Nigeria. The USD510.0mn deal with Shell Nigeria Exploration and Production Company Ltd (SNEPCo) represents a strategic realignment of TotalEnergies’ upstream portfolio. Once finalized, the transaction will increase Shell’s interest in the PSC from 55.0% to 67.5%, while the remaining ownership is held by Esso Exploration & Production Nigeria (20.0%) and Nigerian Agip Exploration (12.5%). This divestment aims at achieving TotalEnergies’ focus on concentrating its portfolio on assets with lower technical costs and reduced emissions, in a bid to lower its cash breakeven point.

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