Africa

Africa Economics Update

Africa Economics Update

SARB to keep loose policy stance to bolster recovery

Policymakers in South Africa kept their benchmark rate unchanged at 3.50% today and concerns about lasting economic damage from the pandemic and recent unrest appear to be growing. Against a backdrop of a sluggish recovery and weak inflation, we think the repo rate will stay on hold until well into 2022.

23 September 2021

Africa Economics Update

CBN maintains interest rates and disruptive FX rules

Policymakers in Nigeria kept their benchmark rate on hold at 11.50% at today’s MPC meeting and will probably continue to do so over 2021-23. And the central bank’s insistence on maintaining a strong currency using disruptive foreign exchange rules is likely to come at an increasingly high economic cost.

17 September 2021

Africa Economics Update

SA to struggle to get back on economic feet after July hit

South Africa’s hard activity data for July underscored the severe blow to the retail and manufacturing sectors from violent unrest and tighter virus restrictions. While much of the hit has probably unwound more recently, weak growth momentum increases the risk of a contraction in GDP over Q3 as a whole.

15 September 2021
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Africa Economics Update

Ethiopia: debt risks loom larger with escalating conflict

Ethiopia’s escalating internal conflict has reignited concerns about the country’s public debt position. While debt dynamics may not look that worrisome on the surface, the political situation threatens the country’s otherwise strong economic growth and the currency’s stability – two key assumptions that debt sustainability rests on. A sovereign default is an increasing risk.

Africa Economics Update

Pandemic not in the rear-view mirror for some time

The economic damage from the latest COVID-19 waves across Sub-Saharan Africa appears to be smaller compared to previous waves, but low vaccination rates mean that officials will have to keep containment measures in place for longer than elsewhere. This will hold back recoveries and prevent international travellers from returning quickly – a particular problem or countries like Kenya and Namibia.

Africa Economics Update

South Africa: bigger GDP doesn’t ease economic woes

Revisions to South Africa’s historic GDP data show that the economy is more than 10% larger than previously estimated. But this doesn’t alter the headwinds facing the economic recovery and, while the government debt-to-GDP ratio may now be lower, underlying debt dynamics are still a major concern.

Africa Economics Update

Zambia: on the rocky road to restore macro stability

The victory of Hakainde Hichilema in last week’s Zambian elections will probably nudge the country in the direction of more prudent macroeconomic policies and reforms under an IMF deal. These may bear fruit over a long time horizon, but we think that the recovery will remain sluggish in the near-term.

Africa Economics Update

A closer look at South Africa’s public finances

The improvement in South Africa’s budget position at the start of this fiscal year has probably now been partially reversed and we think that policymakers will find it increasingly difficult to remain on the narrow path to stabilise the debt-to-GDP ratio over the next few years.

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