Regional slowdown masks key nuances

Data released over the past month show that GDP growth slowed in both South Africa and Nigeria in Q1, but this masks important differences in the fortunes of the region’s two largest economies. In Nigeria, growth slowed to 6.6% y/y, from 7.0% y/y in Q4. However, the overall rate of growth remains impressive, both by regional standards and indeed by the standards of the wider emerging world. However, the slowdown in South Africa to just 1.9% y/y, from an already-weak 2.5% y/y in Q4, is altogether more worrying, particularly as growth is likely to remain subdued over the coming quarters due to ongoing problems in the mining sector and a struggling manufacturing sector.