South Africa is still the region’s laggard

Growth across sub-Saharan Africa continues to hold up well, despite a weak global economic backdrop. Most countries have now released Q2 GDP data, with particularly strong performances recorded in Tanzania and Rwanda. The Nigerian economy is also ticking along at a healthy pace. However, one notable exception is South Africa. Admittedly, growth in Q2 was by no means disastrous. But a combination of weakening demand from the euro-zone and strike action in the mining sector has since taken its toll on domestic activity. What’s more, the problems in the mining sector are now starting to weigh on financial markets, with the South African rand falling by nearly 10% against the US$ in the past month. This in turn may prevent the Reserve Bank from cutting interest rates at its next meeting in November.