• While the state of play in the U.S.-Iran War remains highly fluid, BMI analysts expect that the conflict has the potential to impact Sub-Saharan Africa (SSA) via two primary transmission channels, namely, shifts in global investor sentiment and commodity price volatility.
• The Iranian authorities appear to have rolled back on unilaterally shuttering the Strait of Hormuz1; however, throughput has fallen sharply, driven by coercive signalling from Tehran, spiking insurance and freight costs, and risk avoidance by ship owners and operators.
• Given that around 25% of global oil trade flows through the Strait of Hormuz, Brent prices have risen sharply, currently hovering just shy of US$80 per barrel (/bbl) compared to US$72.5/bbl at close on February 27. Furthermore, given reports of attacks on tankers in the Persian Gulf and on oil facilities in Qatar and Saudi Arabia, there are increased risks that oil prices will rise further.
• Financial markets have also reacted broadly negatively to the conflict, though the scale of losses outside directly exposed regions has thus far been limited. The US Dollar has strengthened modestly, reflecting a mild safe‑haven bid, while the most pronounced declines have been in global equity markets, where risk aversion has driven losses.
• Emerging market (EM) equities have also sold off, and SSA currencies have broadly weakened, including the South African rand, Mauritian rupee, Ugandan shilling, and Zambian kwacha. Mauritius has also been hit particularly hard given its sensitivity to global freight and shipping costs, which have spiked amid rerouting and rising insurance premia.
• Crucially, any sharp and sustained reversal in global risk sentiment, which could trigger external pressures and currency depreciation, would pose the greatest risk to markets with large stocks of foreign‑currency liabilities, where this can translate quickly into domestic financial instability.

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¹The Strait of Hormuz is the world's most critical maritime oil chokepoint, with roughly 20-25% of global seaborne oil and 20% of LNG passing through it. Located between Iran and Oman, it is the sole sea passage from the Persian Gulf to the open ocean, essential for exporting oil from Saudi Arabia, Iraq, Qatar, and the UAE.

(Source: BMI, A Fitch Solutions Company)

• OPEC+ agreed a modest oil output boost of 206,000 barrels per day (bpd) for April on Sunday, March 1, 2026, just as the U.S.-Israeli war on Iran and Tehran's retaliation disrupted oil flows from key members of the producer group in the Middle East. OPEC+ has a history of raising oil output to cushion disruptions, but analysts said the group currently has little spare capacity to add to supply, except for its leader, Saudi Arabia and the United Arab Emirates, which will also struggle to export oil until navigation in the Gulf returns to normal
• Riyadh has been increasing oil production and exports in recent weeks by around 500,000 bpd in preparation for U.S. strikes on OPEC+ member Iran, sources have told Reuters. Oil, gas and other shipments from the Middle East via the Strait of Hormuz have come to a halt since Saturday after shipowners received a warning from Iran saying the area was closed for navigation. Hundreds of ships dropped anchor and were not moving on Sunday, and several ships came under attack.
• Despite fears of a glut that would weigh on prices, global benchmark Brent crude has rallied this year and jumped on Friday to $72.5/bbl, the highest level since July, on fears of a wider conflict in the Middle East.
• OPEC+'s output increase is unlikely to calm markets, said Jorge Leon, a former OPEC official who now works as head of geopolitical analysis at Rystad Energy. "Prices will respond to developments in the Gulf and the status of shipping flows, not to a relatively small increase in output." Similarly, OPEC analyst Helima Croft from RBC also expressed that the market impact from any OPEC output increase will be limited due to a lack of production capabilities outside Saudi Arabia.
• "A tighter market in the first quarter allows the group to continue increasing the quota; however, real barrels being added to the market will be a fraction of it," said Giovanni Staunovo, an oil analyst at UBS. OPEC+'s declining level of spare capacity might have been a factor behind the decision not to opt for a larger boost, he said. Of note, OPEC+ is said to have debated options ranging from 137,000 bpd to 548,000 bpd, according to five sources who declined to be named because they are not authorised to speak to the press.

(Source: Reuters)

• Fitch Ratings has removed National Commercial Bank Jamaica Limited's (NCBJ) Long- and Short-Term Foreign and Local Currency Issuer Default Ratings (IDRs) from Rating Watch Negative (RWN) and affirmed them at 'BB-' and 'B', respectively. Fitch also affirmed NCBFG's senior unsecured notes at 'B+' with a Recovery Rating of 'RR4'. The Rating Outlook for both issuers' Long-Term IDRs is Stable.
• Hurricane Melissa is expected to cause material economic damage and recovery costs, creating a challenging banking environment through 2026–2027 and pressuring financial metrics. However, Fitch views the impact on NCBJ as manageable and less severe than initially anticipated, with sufficient rating headroom to absorb near-term effects. The bank’s scale, diversified model and strong client relationships support pricing power and business generation during stress; total operating income reached US$604.0Mn (+15.3% YoY) as at Sep-2025.
• Asset quality remains stable, supported by diversification and effective risk management. The 90-day NPL ratio improved to 3.9% (from 4.2%) in Q1 FY2026 despite storm disruption, reflecting portfolio segmentation and repricing. While some system-wide deterioration may emerge with lagged hurricane effects, Fitch expects delinquencies and net charge-offs to remain contained over the rating horizon.
• Earnings resilience has been aided by asset-quality management and cost initiatives, though profitability weakened as operating profit/average assets fell to 0.8% (from a 1.2% four-year average) due to elevated impairment charges. Fitch expects only slight additional weakening by next fiscal year-end, with current ratings already incorporating pressured earnings.
• The group also maintains adequate capitalisation, supported by disciplined dividend upstreaming and aligned asset growth. Tangible common equity/tangible assets stood at 10.8%, and the capital adequacy ratio was 15.2%, comfortably above minimum requirements. Overall, capitalisation is expected to remain broadly stable over the rating horizon, with the mandatory reserve fund providing an added buffer.
• Liquidity strengthened despite expectations of deposit outflows, reflecting the bank’s position as the largest deposit taker with a diversified, low-cost base covering 63% of funding needs. The gross loans-to-customer deposits ratio improved to 69.2% (from 72.7%) in FY2025, supporting balanced funding. Liquidity is anticipated to remain robust as hurricane effects materialise, consistent with the current rating profile.
• NCBJ’s ratings remain closely linked to Jamaica’s sovereign rating given government support considerations. Consequently, downward pressure could arise if the bank’s tangible equity ratio falls sustainably below 10%, asset quality or profitability weakens, or the operating environment deteriorates, while an upgrade would likely require an improvement in the sovereign rating alongside the maintenance of a strong franchise, sound financial profile, and tangible common equity above 10% within a stronger operating environment.

(Source: Fitch Ratings)

• The Port Authority of Jamaica (PAJ) is projecting to spend approximately J$10.5Bn on a capital expenditure programme during the new financial year to support several transformative infrastructure projects.
• Among the projects is the Caymanas Special Economic Zone (CSEZ), which is expected to attract international investment. The information is outlined in the 2026/27 Public Bodies Estimates of Revenue and Expenditure, which is before the House of Representatives.
• The CSEZ will support the growth of value-added logistics services, including packaging, labelling and assembly, thereby strengthening Jamaica’s trade and logistics ecosystem. During the new financial year, the PAJ will complete land acquisition to facilitate the commencement of infrastructure works.
• Other projects include completing the design and securing approvals for the new light tower at Portland Cottage, Clarendon, which will serve as a critical navigational aid, alongside continued rehabilitation of lighthouse infrastructure across the island. In addition, PAJ plans to begin eliminating the physical bill of lading from the import cargo clearance procedures, a digital initiative expected to improve processing times, reduce administrative burdens, and enhance overall efficiency within the port system.
• Meanwhile, the document noted that resilience remains a key priority of PAJ. Hurricane Melissa caused significant damage to cruise terminals in Montego Bay, Falmouth, and Ocho Rios, resulting in the temporary suspension of cruise calls and rerouting of itineraries.
• “Recovery and rehabilitation works were completed, with full resumption of cruise operations as of mid-December 2025. Despite the disruption, cruise tourism is expected to maintain stable performance during the 2025/26 financial year, with an estimated 1.33 million passenger arrivals, representing a 14 per cent increase over the previous financial year, while the 2026/27 financial year is projected to see 1.21 million arrivals,” the document said.

(Source: JIS)

• Government revenues in the Bahamas totalled in the first half of FY2025/2026 reached $1.5Bn, up to $66.6Mn compared with the same period last year, as the central government deficit narrowed to $342.4Mn, or 2.1% of GDP, from $367.7Mn, or 2.3% of GDP, in FY2024/2025.
• The Mid-Year Budget Review was delivered in the House of Assembly, where Minister of State in the Office of the Prime Minister Leon Lundy provided an update on revenue and expenditure trends, macroeconomic performance, and fiscal risks. Tax receipts increased by $54.4Mn, or 4.2%, to $1.3Bn, representing 39.1% of the full-year budget target. Expenditure totaled $1.9Bn, up $41.3Mn, or 2.3%, over the same period last year, driven mainly by employee compensation and interest in public debt.
• Minister Lundy noted that data indicate that the central Government recorded a deficit of $342.4Mn, equivalent to 2.1% of GDP, during the first six months of the fiscal year. This represents an improvement compared to the deficit of $367.7Mn, or 2.3% of GDP, recorded in the same period last year.”
• Total expenditure totaled $1.9Bn, an increase of $41.3Mn, or 2.3 %, compared to the same period last year. Recurrent expenditure rose by $42.2Mn to $1.7Bn, driven largely by compensation of employees and interest payments on public debt. Capital expenditure declined slightly by $0.9Mn to $191.7Mn, mainly reflecting reduced payments to private sector partners.
• The Direct Charge on the Government increased by $633.9Mn to $12.4Bn, or 75.1 % of GDP, reflecting borrowing to support fiscal operations and debt management. Key fiscal and macroeconomic risks identified include climate-related events, state-owned enterprise performance, pension liabilities, healthcare pressures, and cybersecurity threats.

(Source: Eyewitness News)

• The Government confirmed that the Panamanian State could receive up to $100 million over an 18-month period as a result of the operation of the Balboa and Cristóbal ports, while the announced public bidding process is underway.  This was reported by the Minister of Economy and Finance, Felipe Chapman pictured below, who explained that the projections are based on estimates built together with port operators and shipping companies. 
• “Based on the projections we have made, taking into account feedback from the port operators and shipping companies themselves, everything indicates that within a period of up to 18 months, because let’s remember that it is temporary, there will be a public tender,” he said.  The minister explained that, in order of magnitude, the Republic of Panama could be receiving up to 100 million balb, a figure that, he indicated, far exceeds what was generated by the contract that was declared unconstitutional by the Supreme Court of Justice.
• The estimates he clarified are linked to the volume of operations and the behaviour of international trade, factors that directly affect the country’s port activity.  The official noted that this scheme is temporary, for approximately 18-months, and that the public tender that has already been announced must be finalised subsequently. 
• For his part, Minister Chapman reiterated that Panama is prepared to assume the expenses involved in any eventual international arbitration.  He noted that the country has already faced similar situations, as happened at the time with the Panama Canal Authority in matters of arbitration, and assured that the Government is ready for any scenario that may arise, which it considers from a positive perspective.

(Source: NewsRoom Panama)

• Oil prices fell by about 2% early on Thursday, February 26, 2026, as the crucial U.S.-Iran talks began in Geneva in what analysts see as one last attempt to reach a nuclear deal through diplomacy.
• Prices were under pressure after the latest weekly data by the U.S. Energy Information Administration (EIA) showed on Wednesday, February 26, 2026, that crude oil inventories in the United States surged by 16 million barrels during the week ending February 20, 2026. Yet, recent weeks have been distorted by weather-related production freeze-offs and the subsequent snap-back in output, which can swing inventories sharply from one report to the next.
• The U.S. continues to amass forces in the Middle Eastern region, with the U.S. military saying it is prepared to execute orders given by U.S. President Donald Trump. Commenting on the oil market implications, ING commodities strategists, Warren Patterson and Ewa Manthey, said early on Thursday, February 26, 2026, that “A constructive resolution would likely prompt the market to gradually unwind as much as a $10 per barrel risk premium, which we believe is currently priced in.”
• The upside risk to oil remains should talks break down, “but the market may hold off on a full reaction until the scale of potential US action against Iran becomes clearer,” the strategists noted. “If we are to see de-escalation between the US and Iran, it should allow weaker fundamentals to feed through to a lower flat price, particularly if the Organisation of the Petroleum Exporting Countries (OPEC) resumes supply increases from April 2026, which we believe they will agree to this weekend.”

(Source: Yahoo Finance)

• Canada is negotiating with the U.S. to remove tariffs on some critical sectors, and a deal could be wrapped into bilateral pacts alongside a review of the United States-Mexico-Canada free trade agreement (USMCA), Dominic LeBlanc, a Canadian senior minister, said on Thursday, February 26, 2026.
• LeBlanc, who is responsible for Canada-United States trade, noted that despite some U.S. officials casting doubt on the USMCA, private conversations between the three governments about the pact were not discouraging.
• Canada is trying to persuade the U.S. to reduce or remove painful tariffs on key sectors such as steel, aluminum and automobiles that President Donald Trump's administration imposed last year. Canadian Prime Minister Mark Carney said last year that the talks on sectoral tariffs were likely to be incorporated into the broader USMCA review. Leblanc plans to meet U.S. Trade Representative Jamieson Greer next week.
• "We are still ready and anxious to do that work," LeBlanc told a business audience in Toronto, referring to removing sectoral tariffs. "Those will be bilateral arrangements," LeBlanc said, adjacent to a trilateral trade agreement.
• Mexico already started formal negotiations with the United States on renewal of the USMCA. LeBlanc said that he is not pessimistic about renewing the trilateral framework, given it is in the economic interests of the three signatories to keep it going. The U.S.-Mexico-Canada free trade deal is up for review and needs to be completed by July 1, 2026.

(Source: Reuters)

• Jamaica's network of strong bilateral relations with foreign governments has been instrumental in generating a comprehensive disaster response to accelerate the nation's recovery from Hurricane Melissa, according to Fitch, BMI. Prime Minister Andrew Holness has acknowledged broad support from CARICOM member states and regional institutions for their 'immediate engagement', alongside numerous bilateral allies such as the US, Canada, Venezuela, the EU and Mainland China. Therefore, while the country faces a lengthy post-Melissa recovery trajectory, its extensive network of bilateral partnerships and active engagement with multilateral institutions will provide crucial support during the country's recovery.
• In the years ahead, Jamaica will maintain its focus on maintaining its strong bilateral partnership with the US, reflecting the significant economic interdependence between the two nations across tourism, remittances and trade sectors. During a January 2026 call, PM Holness and US Secretary of State Marco Rubio reaffirmed their commitment to sustained bilateral cooperation, addressing several key areas, including continued hurricane recovery assistance and US support for these efforts. Achievements in domestic crime reduction, the country's pivotal contribution to anti-gang operations in Haiti and the recent improvement of the US travel advisory from Level 3 to Level 2 (lower is better) represent a significant boost for the storm-affected tourism industry.
• Despite recent US pressure to discontinue the country’s long-standing medical cooperation program with Cuba - an arrangement the government is now reassessing amid objections from the Donald Trump administration - strong ties with Washington remain a cornerstone priority for the Holness administration.
• Still, with Prime Minister Holness having served as chair of CARICOM in 2025, Jamaica will continue to prioritise strong relationships and cooperation with its Caribbean neighbours. Furthermore, the country has joined numerous regional cooperation agreements, including the Alliance for Security, Justice and Development with 18 other Latin American markets promoted by the Inter-American Development Bank to increase regional cooperation against transnational crime.
• Additionally, Jamaica signed an agreement with Barbados, Belize, Saint Vincent and the Grenadines and Dominica in July 2025 to allow open movement of all Caribbean nationals by October 1, 2025, under the CARICOM Single Market and Economy, a development strategy to promote increased regional economic cooperation and integration. The country also enjoys trade benefits from numerous regional CARICOM bilateral trade agreements, including with Venezuela, Colombia, the Dominican Republic, Costa Rica and Cuba.
• Mainland China will also remain an important relationship for Jamaica. Jamaica joined China’s Belt and Road Initiative in 2019 and has received inbound investment from China for infrastructure projects, including the Southern Coastal Highway Improvement Project. Additionally, despite US Secretary of State Marco Rubio expressing concern about China’s alleged ‘predatory practices’ during a joint press conference with PM Holness in Kingston in March 2025, Jamaica continues to court Chinese investment.
• A memorandum of understanding was signed in August 2025 with a Chinese firm to conduct feasibility studies to expand Jamaica’s North-South Highway. While Jamaica’s relationship with China was not featured heavily in the 2025 election season, historic underinvestment in infrastructure and the negative consequences for growth are politically salient issues in Jamaica. We anticipate that Jamaica’s government will continue to accept investment opportunities from China, despite the muted objections and handwringing from the US.

(Source: BMI, a Fitch Solutions Company)

• Governor of the Bank of Jamaica (BOJ), Richard Byles, indicated that the central bank now expects full economic recovery from Hurricane Melissa within two to three years, representing an improvement from the earlier projection of three to four years. Governor Byles explained that this more favourable outlook reflects expectations for a quicker rebound in agricultural output, alongside faster restoration of electricity and telecommunications services.
• Speaking at the BOJ’s Quarterly Monetary Policy Report press conference on February 24, he noted that the central bank anticipates real GDP contraction of between 1% and 3% in FY2025/26, which is narrower than the Bank’s previous estimate. As reconstruction efforts advance and sectoral activity normalises, he added that real GDP growth is projected to recover to between 1% and 3% in FY2026/27.
• On the external front, Byles stated that Jamaica’s current account balance is expected to deteriorate in the medium term, primarily due to hurricane-related disruptions to tourism and increased imports tied to infrastructure rebuilding and relief activities. However, stronger remittance inflows and insurance payouts are likely to partially offset this pressure. In this context, the BOJ projects the current account balance to range from a deficit of 0.5% of GDP to a surplus of 0.5% of GDP in FY2025/26, compared with a surplus of 3% of GDP in FY2024/25.
• That said, Jamaica’s external buffers remain robust. The Governor reported that gross international reserves reached a historic high of US$6.8bn as at February 19, 2026, equivalent to approximately 155.8% of the adequacy benchmark, reinforcing the country’s resilience to external shocks.
• Turning to financial stability, Governor Byles stated that the domestic financial system has demonstrated broad resilience following Hurricane Melissa, with deposit-taking institutions maintaining capital adequacy ratios above regulatory benchmarks. While asset quality showed some softening, the non-performing loan ratio increased modestly to 2.8% at end-2025 from 2.5% at end-2024, remaining well below the prudential threshold of 10%.
• Private-sector credit growth remained stable, expanding by 8% in 2025, compared with 7.3% in 2024, suggesting continued lending support for economic recovery despite the post-hurricane environment.

(Source: JIS)