Africa: Policy moves make headlines in key economies

Policymakers in South Africa and Angola admitted the severity of their countries’ economic problems this month, while their Nigerian peers moved further down the road to autarky. South Africa’s finance minister revised his government’s deficit and debt forecasts this month, with the new numbers suggesting that the country’s slow-motion fiscal crisis is even worse than we had expected. The larger-than-anticipated deficit is partially due to the government biting the bullet and spending the money necessary to stabilise Eskom. Angolan policymakers also faced up to reality this month by finally abandoning their exchange rate trading band and allowing the kwanza to weaken towards the widely used parallel rate. Nigeria’s government moved in the opposite direction, closing all trade across the country’s land borders in a costly (and probably ineffectual) attempt to clamp down on rice imports.