APRIL 12, 2024

BY Danny Lee, Bloomberg News

, Source: Cirium

(Bloomberg) -- Shares of China’s biggest airlines slumped on Friday as investors reacted to news that US carriers are trying to block any increase in flight frequencies between the world’s two biggest economies.

Air China Ltd.’s Hong Kong-traded stock slipped as much as 4.6% while China Southern Airlines Co. fell 2.2%. Shares in Shanghai-based China Eastern Airlines Corp. declined as much as 3.5%, worse than the Hang Seng Index’s 1.9% decrease.

The largest US airlines, in a letter sent Thursday to Secretary of State Antony Blinken and Transport Department Secretary Pete Buttigieg, asked the Biden administration to halt the approval of new flights between the country and China, saying Beijing’s “damaging anti-competitive policies” put US carriers at a disadvantage.

“If the growth of the Chinese aviation market is allowed to continue unchecked and without concern for equality of access in the market, flights will continue to be relinquished to Chinese carriers at the expense of US workers and businesses,” the letter said.

What Bloomberg Intelligence Says

A request by US airlines to the Biden administration to block further Chinese carriers’ flights does not appear to be grounded in market realities. Current US-China flights are split evenly on both sides at 50 per week and remain just about 25% of 2019 levels. While demand may be lower than pre-pandemic, there is scope to continue restoring seats to the benefit of US and Chinese carriers. Blocking further flights would be reciprocated. Russian overflight is an issue, but some Chinese airlines aren’t engaging in the practice on Beijing-East Coast routes.

- Tim Bacchus and Eric Zhu, BI analysts

Click here for the research.

A spokeswoman for China’s Foreign Ministry, Mao Ning, told reporters at a regular press conference in Beijing on Friday, that “increasing direct flights between China and the US is a common understanding reached by our two presidents in San Francisco. It is conducive to enhancing people-to-people exchange and mutual understanding between the two countries.”

China-US seat capacity remains at about one-quarter of 2019 levels, far lower than China’s air connections to other parts of the world. The number of flights between the two economic superpowers stood at around 340 per week prior to Covid.

China’s aviation regulator in early January said it would push for a “significant increase” in direct flights between China and the US.

In late February, the US Department of Transportation allowed Chinese carriers to increase the number of weekly flights to 50 round-trips between China and the US, up from 35. With an open-skies arrangement, this means US airlines reciprocally get the same number.

Another sign of a thawing in relations was the restart of Boeing Co. 737 Max deliveries after almost five years.

One thorn however is China’s use of Russian airspace, which gives Chinese carriers a distinct advantage in flight time, distance and cost. US airlines have been blocked from flying over Russian airspace since Moscow’s invasion of Ukraine in early 2022.

Several Chinese carriers including Air China, China Eastern, China Southern and Hainan Airlines Holding Co. operate direct flights to and from the US, competing against the likes of American Airlines Group Inc., United Airlines Holdings Inc. and Delta Air Lines Inc.

--With assistance from Jinshan Hong, Charlotte Yang and Colum Murphy.

(Updates with China response in 5th paragraph.)

China Airlines Slump on US Moves to Limit Flight Frequencies

APRIL 12, 2024

Stories By Chinedu Eze

Nigeria’s major carrier, Air Peace, which started Lagos-London flight service on March 30, 2024, has denied abandoning one of its passengers at its operating airport in London, Gatwick. 

In a statement signed by the airline management, it said it never abandoned any of its passengers at the said airport and repudiated the video it alleged was purportedly made to tarnish the airline’s image. 

“Our attention has been drawn to a video circulating on social media that Air Peace not only abandoned their passengers at Gatwick Airport, but closed their counter before closing time because the aircraft was overbooked on our London-Lagos flight on Monday, April 8, 2024.

“This video recording was a deliberate and malicious attempt to tarnish the image of Air Peace.  In the video, a number of falsehoods were claimed, specifically: firstly, we closed our counter before time. Secondly, we overbooked our flight and our aircraft was full, hence we quickly closed the door and departed for Lagos. Thirdly, take off time was supposed to be 12:00 noon. 

“We want to state categorically that the passenger, who the narrator escorted to the airport, came very late after check-in phase was already concluded and the counter had closed. Gatwick Airport operate by slot timings allocated to each of the airlines operating out of this airport. The check-in operations of airlines are slot-based, and airlines take turns based on their approved times.  Once your slot timing is up, you must vacate the counters for the next airline’s utilisation. The check-in process ends at 09:00am, as advised in the Terms and Conditions section of our e-ticket and website, and the counter was vacated by Air Peace in accordance with our slot allocation at 09:55am. 

“To ensure passengers do not miss their flights, we send them multiple messages at different times before their flight – 24hrs, 14hrs and 6hrs before flight departure. Departure for this flight was scheduled for 11:10am, so all processes needed to adhere to this time,” the airline stated. 

The statement also said: “It was claimed that we overbooked our flight. The UK Civil Aviation Authority and the Nigeria Civil Aviation Authority can attest to the number of passengers on our manifest for the said flight. The aircraft left Gatwick with some seats unoccupied, so no overbooking took place. 

“Gatwick Airport has CCTV coverage showing the time the passenger arrived at the airport/Air Peace counter and the time the maker of this video got to the airport. The late arriving passenger duly paid the no show fee, was booked to travel on a subsequent flight, and therefore the issue was resolved at the airport. It is disappointing that a different version of what transpired has been circulating. 

“Air Peace will continue to do its best to meet the needs of our passengers,” the statement added.

APRIL 12, 2024

BY Chinedu Eze

After months to turmoil and near bankruptcy as a result of the prohibitive cost of aviation fuel, Nigerian airlines are celebrating following the news that Dangote Refinery will start supplying the product to them in the coming days.

The airlines, it was learnt, hope to gain financial momentum with expected reduction in the cost of aviation fuel as a result of the development.

Currently, the price of aviation fuel ranges between N1,450 to N1, 500 per litre in Lagos and higher in Abuja, Port Harcourt, with almost N2000 per litre in Kano and Maiduguri.

Research shows that aviation fuel constitutes about 60 per cent of cost of operation of domestic airlines and has made flight service unprofitable.

Nigerian airlines have been largely unable to pass the high cost of the product to passengers who are already complaining that cost of ticket has become too high, hence the noticeable dwindling of passenger movement at the airports.

Airline operators told THISDAY that if they dare increase fares further, traffic would reduce drastically and airlines would go out of business.

Records from the Nigerian Civil Aviation Authority (NCAA) showed that more people flew on domestic destination in 2022 than in 2023 and it is projected that if the cost of aviation fuel does not come down, the record of passenger movement this year will be less than the figures of last year.

The CEO of Cleanserve Energy, an oil marketing company and former Managing Director of Arik Air, Mr. Chris Ndulue, told THISDAY that although Dangote Refinery has not started producing aviation fuel, “everyone is expectant that it would soon start and when it does, it is also the expectation of everyone that there will be significant reduction in the price of the product.”

He said the cost of logistics of importing the product would no more be there because it is being produced locally and expressed the hope that Dangote would not sell the product at the international price.

Also, Dangote will sell the product in Naira, not in dollars; thereby reducing the pressure on the naira and eliminating the struggle marketers go through sourcing for dollars to import the product.

He predicted that the distribution of the product from Dangote would still follow the current system where the product is moved to the Apapa from the refinery and distributed from the tank farms there.

THISDAY also learnt that some marketers have made financial commitment for the supply of the product, which indicates that the selling of Aviation fuel through Nigeria’s latest refinery and one of the biggest in the world, has become imminent.

“Dangote has not started producing aviation fuel; however, everybody is expecting that soon it will start. It is expected that the cost will be cheaper as he is producing locally. First, there will be significant reduction in logistics cost, which will reduce the price and Dangote will not sell in dollars but in naira. This means that oil marketers will no more source for dollar for importation of the product. Dangote supply will ease the pressure on the naira; it will also reduce our import and give fillip to the recovery of the naira. When the naira is strengthened and these is an end to importation,” Ndulue said.

According to him, when the refinery fully comes on stream Naira will further appreciate on that account because petroleum product import is huge, which could be about 30 per cent of Nigeria’s total import.

He also admitted that the current price of aviation fuel is very high and that explains why airfares are also high, stopping many who hitherto travelled by air to seek alternative means of transport.

Speaking on behalf of Airline Operators of Nigeria (AON), the Chairman of United Nigeria Airlines, Professor Obiora Okonkwo, said the association would meet with Dangote and have an agreement with the company on the supply of the product to the airlines without passing through oil marketers, adding that through that process, Nigerian airlines will reap full benefit of the cost of the product.

He also believes that the price of the product when produced locally ought to be cheaper than when it is imported.

“We need to approach the company. There should be cost reduction. Import costs more but we cannot say until we see his price. I believe AON should make a deal with Dangote without passing through vendors and I heard that vendors have deposited money for the product already,” he said.

Importation, some industry observer said, constitutes a huge forex challenge for Nigeria adding that this explained why aviation fuel is very costly.

Numbers released by the National Bureau of Statistics (NBS) indicate that Nigeria spent N292.56 billion on the importation of aviation fuel, known as Jet A1 in the first three months of the year – January to March 2022.

An Oil and gas industry publication recently stated that aviation fuel import featured prominently in Nigeria’s trade data for the stated period.

NBS in its Foreign Trade Statistics Report for First Quarter of 2022, said aviation fuel, accounted for 4.96 per cent of Nigeria’s total import of N5.9 trillion, with the commodity ranking the second most imported commodity in the country in the first quarter.

According to the report, aviation fuel import in the first quarter of 2022, represented a significant increase of 287.29 per cent compared to the N75.54 billion spent on its import in the fourth quarter of 2021.

In the fourth quarter of 2021, the NBS disclosed that jet fuel import was the sixth most imported commodity, accounting for 1.27 per cent of the period’s total import figure of N5.94 trillion.

In the first quarter of 2021, there was no mention of jet fuel import in the foreign trade statistics of the NBS, despite the country recording total imports of N6.85 trillion for the period.

The NBS said: “The value of total imports in first quarter 2022 stood at N5.90 trillion, this decreased by 0.67 per cent when compared with the value recorded in the fourth quarter of 2021 (N5.94 trillion); but increased by 21.04 per cent compared to the value recorded in the corresponding quarter of 2021, which is N4.875 trillion.

“In terms of Imports, in the first quarter of 2022, China, The Netherlands, Belgium, India and the United States were the top five countries of origin of imports to Nigeria. The values of imports from the top five countries amounted to N3.44 trillion representing a share of 58.34 per cent of the total value of imports. The commodity groups with the largest values among the top imported products were ‘Motor Spirit ordinary’ – N1.507 trillion’; ‘Kerosene type jet fuel’ – N292.56 billion, and ‘Durum wheat (not in seeds)’ – N258.31 billion.”

APRIL 15, 2024

By Dickson Omobola

The price war ignited by the reduction of airfare of Lagos to London route by Air Peace has raised concerns in the aviation industry over the seeming move by foreign airlines to run the Nigerian carrier out of business.

Already, there are mixed feelings in the industry over the sudden reduction of prices beyond normal rate.

Many believe the development may not have been informed by genuine concern for passengers, but a retaliatory move against Air Peace for earlier crashing the exorbitant prices the airlines charged.

Depending on the airline and time of booking, some mega carriers including British Airways, which charged about N3 million for economy class, now sells the same ticket for less than N2 million.

In recent days also, Royal Air Maroc had dropped its economy ticket to as low as ($456.99) N569,422, just as Virgin Atlantic ($927.99) N1.1 million and Egyptair ($470) N585,620 respectively reduced theirs.

At press time, however, findings by Vanguard showed that Air Peace’s economy ticket was N1.2 million; British Airways’ ($1,348) N1.5 million; Royal Air Maroc’s ($1,299,40) N1.4 million and Virgin Atlantic’s ($1,158) N1.3 million.

Competitive market

Commenting on the development, former acting Managing Director of the Nigerian Civil Aviation Authority, Mr Benedict Adeyileka, in a chat with Vanguard, said the aviation world was a competitive market.

Adeyileka said: “It is a business and everybody has to sell. Yes, there is politics in it, but it also gives room for price fixing. Frankly, price fixing is a very difficult war to fight. There are reasons the price went up before.

”First, there was demand. And once there is demand, the price goes up. Second, they had no competition. We had no Nigerian airline doing international flights until Air Peace came into the picture.

Internal cooperation

“On its own, Air Peace drove the price down. Nevertheless, let me put this on record. The foreign airlines would not have succeeded in doing this without the cooperation of Nigerians. Who are the people selling tickets in Nigeria? They are Nigerians.

”Who are the people giving them multi-city designations? It’s Nigerians. Who are the people allowing Lufthansa to come into Abuja, and from Abuja goes to Port Harcourt? It’s Nigerians. Nigerians are the people allowing Qatar to do the same.

Patriotism

“If the government wants to help, it needs to make it easier for Air Peace to do the same thing that its competitors do. Second, the government can also send a memo out to all government officials, saying if you are traveling out on government funds, you can only fly Air Peace or a Nigerian airline.

”Honestly, Air Peace needs all the support it can get. Unfortunately, I don’t see Nigerians as very patriotic people. Some people would refuse to fly Air Peace because of their slave mentality, yet they will go and fly a 60-year old British Airways or Lufthansa aircraft that was repainted and redecorated.”

Ultimate winner

An aviation management consultant, Mr Babafemi Adeniji, on his part, wondered if the ongoing development could be called a price war.

Adeniji said: “Can we really describe this as a price war? I think it is premature to say it is. Air Peace made an introductory offer to woo price sensitive customers and, as is normal, we have a reaction from the competitors.

”The ultimate winner in any price war is the carrier with the lowest cost. The cost advantage is with the foreign carriers, given their scale and financial position.”

Toxic rhetoric

On what Air Peace could do, Adeniji called for two options, saying: “It either wins by having the lowest cost or finding a way to differentiate itself so that price may not be the main point of decision. Air Peace should strive to leverage their domestic and regional operations to drive loyalty and patronage.

”I am sure the Chief Executive Officer of Air Peace and his team expected a response. I think we need to move away from the toxic rhetoric and take a harder approach to the issue so we can engage more constructively. It’s a response. When you go and pick fights, do you expect competition to roll over and die?”

Business environment

On how government can also help the indigenous carrier, the expert argued that “it  can improve the suffocating  business environment by solving the major issues that make the cost of doing business exorbitant and uncompetitive.”

APRIL 16, 2024

Nigeria’s commercial capital boasts miles of white sand along the Atlantic Ocean that once teemed with locals looking to beat the heat. So what happened?

Before the rains come this month, living in Lagos can feel like walking around in intense heat while wrapped in a blanket.

And for a city on the Atlantic Ocean with a vast coastline of white sand, it’s the sort of weather that calls for a swim to endure the tropical savanna climate.

But in Nigeria’s commercial capital, there are no free public beaches.

Lagos’s capitalist bent and decisions by city officials mean that many of its 25 million residents can’t afford the simple joy of dipping in the ocean on its many hot days. It’s not that the beaches disappeared — although at least one did. It’s that the ones that are available are no longer free.

Private resorts and developers charge entry fees ranging from 3,500 naira ($2.70) to 60,000 for a single-day pass to access the waterfront, which is unaffordable in a country where millions of poor people are grappling with a cost-of-living crisis or living on less than $1 a day.

These businesses have walled off 76 kilometers (47 miles) of coastline from Lagos toward Epe in the east. While indigenous fishermen in the area can still find a way through, others have to pay a fee.

“Lagos is probably the only city on the West Africa coast where residents can’t go to a public beach without paying,” said Loveth Ifeoma Okafor, a tour agent who organizes budget trips across West Africa, comparing the region’s biggest metropolis to other cities in the Gulf of Guinea such as Takoradi in Ghana, Cotonou in Benin, and Abidjan in Ivory Coast — all of which are known for beautiful, free public beaches.

Nigeria has a poor track record in managing public infrastructure, and a scarcity of funds means that recreation ranks far down the list of spending priorities.

In many cases, the government’s response is to privatize what it struggles to manage, letting private investors take the lead in providing schools, hospitals — and access to the beach.

City officials say private beaches are cleaner, more secure and better managed than they were under government management.

“We have had several engagements with those in charge of the beaches in Lagos to see how we are not just giving unnecessary cost when it comes to accessing the beaches,” said Idris Aregbe, senior aide on tourism to the Lagos Governor Babajide Sanwo-Olu. “But what we currently have in the state compares with international standards, which wasn’t so in the past.”

He pointed out that free public beaches remain on the western front toward Benin Republic in the Badagry area, which is some 70 kilometers (43 miles) from central Lagos.

Temperatures that exceeded 34 Celsius (93 degrees Fahrenheit) across Nigeria in February prompted warnings from authorities about a heat wave. While that in itself was nothing new, a stifling humidity above 83% in places like Lagos increased the heat index — which measures temperature and humidity — to more than 50 Celsius.

The privatization of beaches is in many ways a reflection of Lagos’s hustle culture, with the commercialization of public services excluding the poor.

During colonial rule, the British built three breakwater piers known as moles to ease the passage of ships into Lagos Harbour. This had a devastating effect on the city’s coastline, with what was once its most popular shoreside venue — Bar Beach — suffering severe erosion over time and forcing an end to open access for Lagos’s last free-entry strand.

“The beach was right there when I first came to Lagos 12 years ago,” said Rachael Osim, a staffer at a Best Western Hotel in upmarket Victoria Island, where Bar was located. The hotel served the throng of visitors that frequented Bar, and guests could walk barefoot right off the hotel lobby, across the road, and onto its six-kilometer stretch of sand.

“Now, we even climb to the fifth floor and we can’t even see the water,” said Osim.

Bar Beach had been a cornerstone of Lagosian life for decades: It was once a rendezvous for public executions during military rule in the 1970s and 1980s, and in other phases attracted violent gangs, overnight parties and fervent religious practitioners who deified its salty, frothy waters.

City officials said the beach posed a threat to buildings and infrastructure close to the coastline. In 2007, investors led by controversial billionaire Gilbert Chagoury began reclaiming nine square kilometers of land in the area for a sprawling new city that would — on completion — house about 250,000 people and accommodate another 150,000 jobs.

In place of the beach stand columns of skyscrapers, dredgers and other machinery as investors develop the Eko Atlantic City, an enclosure for the ultra-rich that has been dubbed Africa’s Dubai.

Tenants at the enclosure have a concrete boulevard on the edge of the ocean which is separated by a jut of rocks, known as the Great Wall of Lagos, to keep the Atlantic in its place.

— With assistance from Jody Megson and Karolina Sekula

APRIL 16, 2024

Flights arriving into Dubai airport - the world's busiest for international travel - are being temporarily diverted this evening to other locations as the city-state is hit by major flooding after heavy rainfall.

More than 120mm (4.7 inches) of rain came down on Tuesday, which is the typical yearly average in the desert nation - with more expected in the coming hours.

Homes and roads were flooded and partially submerged cars were left abandoned.

The tarmac at Dubai International Airport was also flooded as planes made their way around what looked more like a lake.

Earlier, it was announced airport operations were suspended for 25 minutes due to the bad weather, with at least 21 outbound and 24 inbound flights cancelled during the day, and three flights diverted to other airports.

Despite the disruption, the airport said in its latest announcement that departure flights were continuing to operate.

The airport said that inbound flights would be diverted until weather conditions improve.

An airport spokesperson was quoted by Gulf News as saying the flights would go to the nearest "available airports".

"The airport is working hard with its response teams and service partners to restore normal operations and minimise inconvenience to our customers," said the spokesperson.

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Passengers are being urged to check with their airline about the latest information on their flight status.

There was also heavy rainfall in other parts of the United Arab Emirates (UAE), a federation of seven emirates that consists of Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah.

Sky News weather producer Joanna Robinson said: "Intense showers and thunderstorms have been affecting eastern parts of the Arabian Peninsula and southern Iran today, with further flooding rains possible on Wednesday.

"The risk will also extend into southwestern parts of Pakistan.

"It's not unusual to see flash flooding events in the Gulf region, it happens most years, but usually between December and March.

"It looks like over 40mm of rain fell at both Dubai airports earlier today, potentially making it the wettest April day in Dubai according to the Met Office.

"Urban areas and baked ground both increase the risk of surface water flooding as the water is unable to soak through the ground easily."

Lightning flashed across the sky, and it sometimes touched the tip of the world's tallest building - the Burj Khalifa.

Rain is unusual in the UAE - but it happens periodically during the cooler winter months.

Many roads and other areas have insufficient drainage due to the lack of regular rainfall, causing flooding.

APRIL 17, 2024

(Bloomberg) -- Emirates is halting all check-ins for passengers for the day as bad weather in Dubai disrupts travel in one of the busiest aviation hubs in the world. 

The biggest international airline said that check-ins for all passengers would be halted from 8 am local time and run through midnight. Transit passengers are permitted to proceed to their connecting flights, the carrier said in a statement.

“Emirates is working hard to restore our scheduled operations, and our teams will provide all possible support to affected customers,” the airline said in the statement. 

Strong rainfall and storms that have battered Dubai have caused travel chaos, disrupting public life and affecting travel plans. The record rainfall has resulted in delayed or diverted flights, while cars have been left stranded on flooded roads. Dubai airport, one of the world’s busiest, is suffering from “significant disruption,” it said Wednesday in a statement.

APRIL 17, 2024

Verity Ratcliffe and Kateryna Kadabashy, Bloomberg News

A taxi navigates floodwaters in Dubai. Photographer: Giuseppe Cacace/AFP/Getty Images , Photographer: Giuseppe Cacace/AFP

(Bloomberg) -- Dubai flights have been severely disrupted and cars were left stranded on flooded roads after record rainfall over the past day brought the city to a standstill.

The United Arab Emirates experienced its heaviest downpour since records began in 1949, Dubai’s media office said in a statement. It caused chaos for residents as water entered the city’s expensive homes and underground car parks, left some buildings without power and resulted in widespread flooding even a day later.

One person died after being swept away by flash floods in the north of the country, the National newspaper reported. In neighboring Oman, at least 18 people have died in recent days as the heavy rains caused flooding, AP reported, citing a statement from the country’s National Committee for Emergency Management.

Dubai airport, one of the world’s busiest, is suffering from “significant disruption,” it said Wednesday on X. Online departure boards showed most arrivals or departures as canceled or delayed as of 1 p.m. local time. Emirates, the biggest international airline, said it was halting all check-ins for passengers for the day. 

The heavy rains across the desert nation came after cloud seeding. The UAE has been carrying out seeding operations since 2002 to address water security issues, but the lack of drainage in many areas can trigger flooding, including in cities such as Dubai that’s a global financial and business center. 

The Gulf state’s National Center of Meteorology dispatched at least seven seeding planes from Al Ain airport between Sunday and Monday, the government agency said. That technique involves implanting chemicals and tiny particles — often natural salts such as potassium chloride — into the atmosphere to coax more rain from clouds.

With global warming threatening a surge in heat-related deaths in the UAE, Dubai’s media office on Tuesday dubbed the downpours “rains of goodness,” despite the flooded houses and overflowing swimming pools.

The latest storms followed heavy rains earlier this year that had also caused flooding and traffic snarls. Dubai’s government told its employees to work from home again on Wednesday due to the weather conditions and urged private employers to do the same. Schools have been directed to remain closed.

People took to social media to share updates on the aftermath of the weather. Some videos showed cars being swept off roads, one showed the ceiling of a shop collapsing as water inundated one of Dubai’s most popular malls, while another claimed to have footage of a collapsed road near the eastern city of Al Ain. 

There was some rainfall elsewhere in the region as well. Dammam in eastern Saudi Arabia saw the heaviest showers in the country in the past 48 hours. Riyadh was hit with sand and wind storms that at one stage led to near-zero visibility but otherwise faced dry conditions on Tuesday.

Saudi’s flagship carrier Saudia and budget airlines Flynas scrapped two dozen flights between them, according to FlightAware. Some early Wednesday flights from Bahrain’s main airport were canceled but departures resumed mid-morning, according to the Bahrain International Airport website. Qatar’s Hamad International Airport was also operating normally.

(Updates with Saudi, Bahrain weather in the penultimate paragraph.)

APRIL 17, 2024

Report finds there are now 135,200 millionaires on continent

Wild currency depreciations have chipped away at their wealth

by Adelaide Changole, Bloomberg News

, Bloomberg

(Bloomberg) -- The number of millionaires living in Africa dropped by nearly 20,000 in the past decade as the continent’s ultra-rich either moved away or saw dramatic currency depreciations eat away at their wealth.  

There are now just 135,200 individuals with wealth of $1 million or more, an 8% decline from 2013, according to a report by Henley & Partners. Along with the continent’s 342 centimillionaires and 21 billionaires, those individuals have total wealth of $2.5 trillion, the consultancy found. 

“Currency depreciation and underperforming stock markets have chipped away at Africa’s wealth compared to global benchmarks,” Dominic Volek, group head of private clients at Henley & Partners, said in the report. “With African stock markets underperforming against global peers, local property markets facing headwinds, and currencies depreciating against the dollar, African investors have seen their wealth eroded on multiple fronts.”

Africa’s economies have faced multiple challenges over the past decade that have put strain on their budgets and currencies, from Covid-19 to rising interest rates to geopolitical tensions. South Africa, which has more than twice as many wealthy individuals as any other African country, has lost 20% of its millionaires in the last 10 years as the country battled logistics constraints, rolling blackouts and endemic crime and corruption. 

During that time, the South African rand has fallen 43% against the greenback and the FTSE JSE All Share Index has also trailed the S&P 500. 

Egypt and Nigeria, which are home to the next highest number of rich people after South Africa, have been grappling with runaway inflation, foreign-exchange shortages and multiple currency devaluations to allow their local units to trade more freely. 

Despite all the challenges, Africa’s millionaire population is expected to rise by 65% in the next decade, according to the report. The gains will be driven by a surge in wealth in Mauritius, Namibia, Morocco, Zambia, Kenya, Uganda, and Rwanda, which are all expected to experience at least 80% millionaire growth, the report said. 

“Mauritius, with its stable governance and favorable tax regime, is projected to experience a remarkable 95% growth rate, positioning it as one of the world’s fastest-growing wealth markets,” the report said. “Namibia, too, is poised for impressive high-net-worth growth.”

APRIL 18, 2024

The Central Bank governor, Olayemi Cardoso, has said the recent decline in the nation’s foreign reserves was used to settle debts owed to international creditors and not to defend the naira.

The governor made this known during an interactive session with Abebe Aemro Selassie, the International Monetary Fund’s (IMF) director of the African department, on Wednesday.

Concerns have been raised by Nigerians recently regarding the significant decrease in the country’s exchange reserves, dropping by around $2.16 billion in just 29 days, despite robust efforts to stabilize the naira.

Data retrieved from the CBN website regarding the movement of foreign reserves reveals that as of April 15, 2024, the FX reserves stand at $32.29 billion, marking a notable decline from the $34.45 billion recorded on March 18, 2024.

This decline, the lowest in six years, signifies a definitive halt to a period of consistent growth. During this time, the reserves experienced a 43-day surge, accruing $1.28 billion between February 5 and March 18, 2024.

However, speaking at the event, Cardoso stated that there were no intentions to defend the currency with the external reserves, as it was counterintuitive.

The CBN boss clarified that the depleting external reserve is due to the payment of debts.

“As much as I have read in the recent few days, some opinions with respect to what is happening with our reserves, and the central bank defending the naira, if you think back to what our overall policy and philosophy has been, you can see is counterintuitive,” he said.

“What you see with respect to the shifts in our reserves, is the shifts that you will find in any country’s reserve situation where, for example, debts are due and when certain payments need to be made, they’re made because that is also part of keeping your credibility intact.

“Other times, money comes in and you know, takes it up again, and if you watch the next couple of days, I think between yesterday and today, we had about 600 million that came to the reserves account.

“All I will say is that we are looking towards ensuring that we have a market that operates on its own: willing buyer, willing seller and price discovery. That’s where we’re going to be.”