CMC Motors steers out of East Africa

Nigeria is joining a different league. 

Last week, the country was admitted as a “partner country” of the BRICS bloc of developing economies. 

Established in 2009, BRICS—an acronym for Brazil, Russia, India, China, and South Africa—aims to serve as a counterbalance to the Group of Seven (G7) leading industrialised nations, which include the United States, Canada, United Kingdom, France, Germany, Italy, and Japan.

While Nigeria’s “partner country” status doesn’t equate to full membership, it opens up avenues for deeper economic cooperation, increased trade opportunities, and access to BRICS-backed initiatives like the New Development Bank, a lending institution modelled after the World Bank, which has approved nearly $33 billion in loans since its inception in 2015. It also reinforces the bloc's aim to include voices from the Global South in shaping a multipolar world order.

Nigeria’s admission as a partner country in BRICS comes at a pivotal moment as the bloc seeks to expand its influence by including major fossil-fuel-producing nations. This move aligns with BRICS’ broader strategy to challenge the dollar’s dominance in global oil and gas trading by promoting the use of alternative currencies. 

Nigeria’s inclusion in the bloc may enable the West African country to tap into BRICS’ financial resources, including the $100 billion liquidity facility established in 2016 to support member nations during economic distress. 

With China as Nigeria’s largest creditor, holding $4.34 billion of Nigeria’s external debt as of 2023, this new partnership with BRICS could also provide alternative funding options for Nigeria.

CMC Motors Group, one of East Africa’s top vehicle distributors for over 60 years, is closing its doors in Kenya, Uganda, and Tanzania. 

The company announced its shutdown on January 17 citing mounting operational costs, currency depreciation, and the loss of critical vehicle franchises as factors. 

CMC entered East Africa—starting with Kenya—in 1948, and went public in 1956, showing a strong market reception. It followed that by expanding into Uganda in 1960 and Tanzania later in 2007.

The mobility company built a reputation by distributing global automotive giants like Ford, Volkswagen, Jaguar, and Land Rover, becoming a household name in East Africa. For years, it was the go-to provider of reliable vehicles and equipment across the region. But over the past decade, the company faced growing challenges.

In 2014, Dubai-based Al-Futtaim Group acquired CMC in an $86 million deal, delisting it from the Nairobi Securities Exchange (NSE). Despite restructuring attempts, the company could not escape setbacks, notably the loss of car franchises. The most notable blow came in 2023, when CMC lost the Ford dealership to competitor Salvador Caetano, following the earlier exit of Jaguar, Land Rover, and Volkswagen. Shortly after, it laid off 169 employees to reduce overhead costs.

The layoffs didn’t slow down the company’s problems as vehicle import costs also soared and the regional economy slowed further crippling CMC’s numbers. The company's shutdown will result in at least 200 job losses across East Africa.

After Mobius Motors, CMC becomes the second recognisable mobility brand to exit East Africa in the last six months. While Mobius remains in talks for an acquisition, the future for CMC looks set—down and out.

Egypt’s headline inflation eased to 24.1% in December 2024, down from 25.5% in November, marking its lowest level since December 2022. This slowdown was driven largely by a sharp drop in food inflation, particularly for fresh vegetables, while core inflation (excluding food and energy) also edged down to 23.2% from 23.7%.

December marked the third consecutive month of declining inflation, signalling some improvement. However, costs for services like rent, internet, and dining continued to rise. Despite inflation remaining well above target, the Central Bank of Egypt maintained interest rates during its December 26 meeting, extending a pause that began in March 2022 after cumulative hikes of 1,900 basis points.

Egypt's economy is in a tough spot. The rates have not been this high since 2017 when it experienced an economic slowdown. Non-food sectors and commodities like fuel are still driving price increases, putting pressure on Egypt’s economy. Without seasonal declines in food prices, headline inflation would likely have stayed higher, as food remains a major contributor to overall inflation.

While the temporary relief from lower food prices offers some respite, challenges in housing and services could reignite inflationary pressures. The Central Bank’s next policy meeting on February 20, 2025, will be key in managing these dynamics.