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Delayed vaccination in SA, dovish SARB, downbeat IMF

The announcement this week that South Africa is suspending the roll-out of Johnson&Johnson vaccines, on which it heavily relies, risks further delaying an already slow vaccine campaign. Meanwhile, comments by South African Reserve Bank Governor Lesetja Kganyago support our view that a tightening cycle is unlikely this year; most expect the SARB to begin hiking rates in 2021. Finally, the IMF’s recently released regional outlook for Sub-Saharan Africa shares our downbeat view on the region’s recovery prospects, but we still think growth in most countries will exceed the Fund’s expectations.
Virag Forizs Emerging Markets Economist
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Africa Economics Update

Ethiopia: Unlikely to replicate exceptional growth again

Ethiopia has been grappling with the fallout from its internal conflict and severe drought which, coming alongside spillovers from the war in Ukraine, will result in much weaker growth in the coming years and a sovereign debt restructuring is likely. Over the medium-term, we're doubtful that the government will be able to push through its ambitious reform agenda. Ethiopia’s growth miracle, in which the economy grew at rates of 8-12%, has come to an end.

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5 August 2022

Africa Economics Update

Kenya: elections no cure for economic woes

Kenya’s general election scheduled for Tuesday is set against a challenging economic backdrop, and no matter the winner, the country’s outlook is likely to remain overshadowed by large macroeconomic imbalances and high public debt risks. Oil and the Gulf Drop-In (9th Aug): What’s the outlook for oil prices and what does that mean for Gulf economic outperformance? Join economists from our Commodities and Emerging Markets teams for this 20-minute briefing. Register now.

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Africa Data Response

Nigeria Consumer Prices (May)

The second consecutive drop in Nigeria’s headline inflation rate, to 17.9% y/y in May, will probably go some way towards easing policymakers’ recent concerns about high and rising inflation. While we expect inflation to remain well above the central bank’s target for the foreseeable future, the MPC is likely to keep interest rates unchanged over the coming years.

15 June 2021

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The perils of deficit monetisation in Nigeria

Nigeria’s government has turned to the central bank to plug ever larger budget deficits in recent years and policymakers are unlikely to kick their deficit monetisation habit, particularly if the fiscal position worsens next year (as we expect). This will deepen some of Nigeria’s existing economic woes, including high inflation, downward pressure on the naira and weak economic growth.

14 June 2021

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Filling gaps: vaccine supply in SSA & electricity in SA

Leaders of G7 nations meeting this week are ramping up efforts to provide more vaccines to the developing world, which – along with the prospect of larger supplies from China – could give a lift to struggling inoculation campaigns and economic recoveries in Africa. Meanwhile, South Africa announced further steps to address its chronic electricity supply problem that has long weighed on the economy, but the measures will probably take some time to bear fruit.

11 June 2021
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