Major economies rebound, policy easing gains pace

The latest data support our view that the recoveries in Sub-Saharan Africa’s big three economies will be stronger than most expect. Activity data in Nigeria, South Africa, and Angola all suggest that growth accelerated in Q2. The turnaround in South Africa – where the economy entered a technical recession in Q1 – was particularly pronounced. Economic news elsewhere in the region was less positive. The economies of Kenya and Rwanda both appear to have weakened in the first half of the year. Meanwhile, decisions by major central banks in the region this month have reinforced our view that monetary policy will be loosened by more than most expect. We were one of the few analysts to correctly predict that the South African Reserve Bank would cut its key policy rate earlier this month. And while the Central Bank of Nigeria left its key rate on hold, the accompanying statement suggests that policymakers will ease monetary conditions later this year.