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Nigeria Consumer Prices (Apr.)

Inflation in Nigeria jumped to 16.8% y/y last month and the headline rate is likely to rise further as spillovers from the war in Ukraine filter through. Pressure to tighten monetary policy is mounting but we think that MPC members will stick to their guns and keep interest rates on hold over the coming months. EM Drop-In (17th May): Do current EM debt strains point to a repeat of the kinds of crises seen in the 1980s and 1990s? Join our special briefing on EM sovereign debt risk on Tuesday. Register now.
Virag Forizs Emerging Markets Economist
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More from Africa

Africa Economics Weekly

SA corruption and inflation on display, Ghana’s troubles

The president of South Africa and the ruling ANC are taking the heat as corruption accusations fly. With political bickering likely to grow, the focus on boosting the economy with much-needed reforms is likely to take a backseat. Meanwhile, we think that the latest inflation reading out of South Africa will shift the debate on the scale of further monetary tightening towards 75bp steps. And in Ghana, policymakers appear to be stepping up efforts to support the cedi but at the risk of adding to the economy's pain.

24 June 2022

Africa Data Response

South Africa Consumer Prices (May)

The rise in inflation in South Africa to an above-target 6.5% y/y in May is likely to shift the debate to a choice between a 50bp and a 75bp hike to interest rates at July’s MPC meeting. But inflation continues to be driven by food and energy price effects and, if the headline rate falls sharply over the rest of this year as we expect, interest rates will probably be raised by less than investors anticipate over 2022-24.

22 June 2022

Africa Economics Update

Where next for inflation in South Africa?

Inflation in South Africa has been close to the top of the central bank’s target range in recent months, but the country has avoided the surge in inflation seen across much of the world. And there are reasons to think that the headline rate will drop back sharply by the end of this year. That underpins our view that monetary policy will ultimately be tightened by less than investors currently expect.

21 June 2022

More from Virag Forizs

Africa Economics Weekly

Monetary politics in Nigeria, Ghana’s efforts to curb debt

Nigerian President Buhari’s instruction that current government officials planning to run for the country’s highest office should resign will probably leave the central bank without a governor, but this is unlikely to lead to meaningful change in monetary policy before the elections early next year. Elsewhere, the latest jump in Ghana’s inflation rate will up the pressure on the central bank to raise interest rates further. Yet, officials remain steadfast not to turn to the IMF amid rising investor concerns about the country’s debt position. EM Drop-In (17th May): Do current EM debt strains point to a repeat of the kinds of crises seen in the 1980s and 1990s? Join our special briefing on EM sovereign debt risk on Tuesday. Register now.

13 May 2022

Africa Data Response

South Africa Manufacturing PMI (Apr.)

The plunge in South Africa’s manufacturing PMI in April suggests that there was a large blow to activity from flooding in a key province and renewed power cuts. One consequence of this economic weakness is that policymakers are likely to proceed cautiously with their tightening cycle. We expect the Reserve Bank to raise the repo rate by 25bp, to 4.50%, later this month.

3 May 2022

Africa Economics Weekly

SA’s privatisation push, Africa’s growing food insecurity

Momentum appears to be building within South Africa’s ruling ANC party to shift towards a more private sector-led economic model. But given the party’s track record, we wouldn’t hold our breath. Meanwhile, spillovers from the war in Ukraine are causing growing concerns about a food crisis in EMs. Countries in Sub-Saharan Africa are particularly vulnerable due to their dependence on imported agricultural products and fertiliser.

29 April 2022
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