My subscription
My Subscription All Publications

Virus waves across SSA, SARB tightening cycle

After a week filled with central banks around the globe pivoting in a more hawkish direction, we have now pencilled more hikes into our interest rate profile for South Africa (but only after a pause in the tightening cycle in January due to the Omicron wave). At this point, the authorities there have still not moved to tighten virus containment measures. The same applies elsewhere in the region, even though COVID-19 cases have started to pick up too.
– This will be the last Economics Weekly for 2021. The next Weekly will be sent on Friday 7th Jan. 2022 –
Virag Forizs Emerging Markets Economist
Continue reading

More from Africa

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

Africa Economics Update

Hawks’ majority in SARB to be short-lived

Policymakers in South Africa upped the pace of tightening today, raising the repo rate by 50bp to 4.75%, as concerns about inflation (and inflation expectations in particular) have grown. We don’t think that the hawks will have their way for long though as the tightening cycle is likely to revert to a more gradual pace from the second half of this year.

19 May 2022

More from Virag Forizs

Africa Economics Weekly

Omi-chronicles from South Africa and beyond

South African officials seem to be pushing vaccine take-up to curb the latest Omicron-induced virus outbreak rather than tightening restrictions on activity. But with pressure building on the health system, this risks the introduction of harsher and more economically damaging containment measures down the line. Elsewhere in Sub-Saharan Africa, even as policymakers counter vaccine hesitancy with mandates, problems with distribution and the supply of doses are likely to hold back inoculation campaigns.

10 December 2021

Africa Economics Update

Nigeria’s recovery losing some steam

Timely activity figures suggest that Nigeria’s economy lost momentum in early Q4 as oil sector woes continued and the non-oil economy’s recovery slowed. Headwinds have only built since.

9 December 2021

Africa Data Response

South Africa Activity Data (Oct.)

South Africa’s hard activity data for October confirm that the economy was struggling even before the emergence of a fourth virus wave, which will probably dampen activity further. In light of this, policymakers at the Reserve Bank will be in no rush to tighten monetary policy aggressively.

9 December 2021
↑ Back to top