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What to expect in Sub-Saharan Africa in 2022

Sub-Saharan Africa will remain a laggard in the global recovery. The weak economic backdrop means that South Africa’s government is unlikely to stick to its austerity plans and the debt ratio will rise more quickly than most anticipate. Debt risks are also likely to build in other parts of the region. Meanwhile, Nigerian officials will probably double down on their unorthodox policies. Drop-In: Neil Shearing will host an online panel of our senior economists to answer your questions and update on macro and markets this Thursday, 13th January (11:00 ET/16:00 GMT). Register for the latest on everything from Omicron to the Fed to our key calls for 2022. Registration here.
Jason Tuvey Senior Emerging Markets Economist
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Africa Economics Update

CBN finally steps up to curb inflation

The Central Bank of Nigeria delivered a surprise 150bp interest rate hike, to 13.00%, today amid mounting inflation and balance of payments concerns. We expect rates to be raised by another 100bp, to 14.00%, in July but further tightening seems unlikely especially as the 2023 elections come into view.

24 May 2022

Africa Data Response

Nigeria GDP (Q1)

Nigeria’s GDP growth slowed to 3.1% y/y in Q1 as robust growth in the non-oil sector was more than offset by a slump in the oil sector. Looser fiscal policy ahead of elections in early 2023 will provide some support to activity going forward, but continued weakness in oil production and disruptions caused by draconian FX policies underpin our below-consensus forecast for growth of 2.3% over 2022 as a whole.

23 May 2022

Africa Economics Weekly

Markets and monetary policy, mounting pressure on naira

Recent investor risk-off sentiment has pushed up sovereign dollar bond yields across Sub-Saharan Africa, fuelling debt risks further, and has put currencies under pressure. Central banks appear to be taking note, with some policymakers turning tightening cycles up a notch. In Nigeria, the recent weakness of the currency on the black market was attributed to election-related spending, but the bigger issue is that downward pressure on the naira stems from the central bank’s unorthodox FX policies.

20 May 2022

More from Jason Tuvey

Emerging Europe Economics Update

First thoughts on Turkey’s FX-indexed deposit scheme

A new scheme announced by Turkey’s President Erdogan last night, which compensates holders of lira deposits for exchange rates losses, has triggered a sharp rally in the lira and will help to mitigate some of the risks that had started to crystalise in the banking sector. But the policy pushes exchange rate risks to the public finances – up till now a point of strength in the economy.

21 December 2021

Emerging Europe Economics Update

Turkey’s crisis in four charts

Following yesterday’s interest rate cut in Turkey, the lira has plunged again and is now faring worse than other Emerging Europe currencies have done during recent sudden stops. There are some signs of stress emerging in the banking sector. These aren’t at the stage yet that will get policymakers to turn course nor result in a more severe crisis, but this is a key area to watch.

17 December 2021

Emerging Europe Economics Weekly

Poland overheating fears, Turkey crisis rumbles on

Concerns that Poland's economy is overheating will have only been reinforced by figures this week showing a surge in wage growth and a sharp widening of the current account deficit in October. Loose fiscal policy next year risks adding fuel to the fire, but aggressive monetary tightening should help to take some steam out of demand and inflation. Meanwhile, the decision by Turkey's central bank to lower interest rates by 100bp this week has deepened the lira's woes - it is now down by 55% against the dollar year-to-date. Interest rate hikes are clearly off the table and it's more likely that policymakers will resort to capital controls if strains in the banking sector intensify. – This will be the last Economics Weekly for 2021. The next Weekly will be sent on Friday 7th Jan. 2022 –

17 December 2021
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