Rising political risks in Ethiopia, SA GDP revision’s pros?

An internal political conflict in Ethiopia is escalating with an all-out civil war no longer a remote prospect. Strains in the country’s already fragile balance sheet are growing and a messy sovereign default is a real risk. And in South Africa, this week’s GDP revisions may have lowered the government debt-to-GDP ratio, but the outlook for the public finances has not improved.
Virag Forizs Emerging Markets Economist
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Africa Economics Weekly

Lockdown lessons from SA, influx of jabs and cash?

South African policymakers appear to be reluctant to impose restrictions in the face of the threat from the Omicron variant, but their hand could be forced if the health system comes under strain. In previous waves, measures have been tightened when hospitalisations have breached 5,000. While we’re some way off that, the figures are on an upwards path. Meanwhile, ambitious pledges by Africa’s key development partners including China and the EU on vaccines and infrastructure investment will lift the region’s longer-term economic prospects. Finally, even with the IMF on board, restoring Zambia’s debt sustainability will remain challenging.

3 December 2021

Africa Economics Update

Debt sustainability in Zambia: mission impossible?

Zambia’s new administration has made encouraging noises about restoring macroeconomic stability and addressing the country’s public debt problem. But it will be a tall order to secure a large restructuring and stick to the fiscal consolidation that will be needed to leave the public debt ratio on an even keel.

2 December 2021

Africa Data Response

South Africa Manufacturing PMI (Nov.)

South Africa’s manufacturing PMI rebounded last month, but the emerging fourth virus wave and the threat from the Omicron variant has clouded the outlook for activity in the sector and the wider economy.

1 December 2021

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Africa Data Response

Nigeria GDP (Q2)

The pick-up in Nigeria’s headline GDP growth to 5.0% y/y in Q2 was largely reflective of favourable base effects created by the sharp downturn a year ago. It appears that the underlying pace of growth actually slowed in Q2 and we think that the recovery will continue to disappoint over the next few years.

26 August 2021

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.

25 August 2021

Africa Economics Weekly

BIG a non-starter, rand on the rocks, Hichilema hired

The South African authorities appear to be devoting increased attention to the idea of a permanent basic income grant (“BIG”) but, in practice, such proposals are probably dead on arrival. Meanwhile, the sell-off in the South African rand has gathered pace this week and we think that the currency has further to fall. Finally, the election of Hakainde Hichilema as Zambia’s next president has been embraced by investors. While it looks like he will adopt more prudent policies than his predecessor, we think these will only pay off in the long-run.

20 August 2021
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