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Nigeria’s oil reform, Angola’s debt, SA restrictions

Nigeria’s long-awaited Petroleum Industry Bill is on the verge of making into law, but it probably comes too late to propel a marked turnaround in the oil sector and will not resolve many other issues afflicting the economy. Elsewhere, the IMF’s view that Angola’s debt position is sustainable is based on some pretty optimistic assumptions regarding growth and fiscal consolidation. Finally, comments from one of South Africa’s MPC members echo our view that the tightening of virus restrictions won’t inflict severe damage on the economy and that interest rates will be raised later and more slowly than investors currently expect.
Jason Tuvey Senior Emerging Markets Economist
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More from Africa

Africa Economics Weekly

Kenya’s elections up in the air, mixed FX bag across SSA

The fact that Kenya’s elections have, so far, proceeded peacefully have supported a rally in the country’s bond market. But with no official results available yet and reports pointing to a tight race, significant risks abound. Meanwhile, currencies of major African economies have fared quite differently over the past month. While the South African rand has rallied, the further falls in the Ghanaian cedi and Nigerian naira (on the parallel market) point to increasingly acute economic problems.

12 August 2022

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.

10 August 2022

Africa Economics Weekly

Zambia’s creditors pledge debt relief, Kenya’s elections

News that Zambia’s official creditors agreed to provide debt relief is certainly encouraging and will unlock IMF funding. But the terms of the deal remain unknown, leaving in doubt that the country’s public debt will return to a sustainable path. Meanwhile, investors are on tenterhooks just as much as Kenyan voters ahead of Tuesday’s elections that are shaping up to be a close race. 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.

5 August 2022

More from Jason Tuvey

Emerging Europe Economics Update

Turkey’s inflation risks mount, CBRT to delay rate cuts

Turkish inflation hit a two-year high in June and recent domestic energy price hikes will cause it to rise even further over the next couple of months. High inflation and signs of a quick recovery from May’s lockdown mean that the central bank will probably delay the start of its easing cycle until later this year. We now expect the one-week repo rate to be lowered to 17.00% by end-2021 (previously 14.00%).

7 July 2021

Emerging Europe Data Response

Turkey Consumer Prices (Jun.)

The fresh rise in Turkey’s headline inflation rate to 17.5% y/y in June, coupled with signs of a strong rebound in activity after May’s three-week lockdown, means that an interest rate cut in the next couple of months is increasingly unlikely. An easing cycle is now more likely to commence later this year when inflation looks set to fall sharply.

5 July 2021

Emerging Europe Economics Weekly

Turkey dollarisation, Ukraine-IMF, Russia & Poland rates

Turkey’s central bank took steps this week to tackle deposit dollarisation in the banking sector, although these efforts will fail to make headway in the absence of a stronger commitment to rein in high inflation. Meanwhile, Ukraine’s government still has work to do to secure the next tranche of its IMF loan, but the economy can muddle through without help from the Fund for some time. Finally, other developments this week suggest that Poland’s central bank may stick to its recent dovish rhetoric while Russia looks like it could accelerate the pace of monetary tightening.

2 July 2021
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