Africa

Ghana

Economic damage report from latest virus waves

The evidence from the latest COVID-19 waves sweeping through Sub-Saharan Africa point to a smaller economic blow compared to previous waves. Of course, there is a considerable degree of divergence, especially between countries imposing harsh restrictions – such as Uganda and Kenya – and those with more light-touch measures, like Nigeria or Ghana. Outside of South Africa, there is little sign that daily new cases are about to peak, suggesting that curbs to tame outbreaks will remain in place and continue to dampen activity. Worryingly, low vaccination rates across the region mean that economies will suffer under on-and-off restrictions with the emergence of any new virus waves.

27 August 2021

Lagging behind

Vaccination campaigns across Sub-Saharan Africa will continue to struggle, leaving the region vulnerable to renewed virus outbreaks. This, combined with tight fiscal policy, a slow return of tourists and falls in commodity prices means that economic recoveries will lag behind those in other parts of the world. GDP across most of the region is likely to stay well below its pre-crisis path over 2021-23.

5 August 2021

SDR allocation a positive but won’t solve debt woes

The $650bn allocation of IMF Special Drawing Rights (SDRs) that was finally signed off by the IMF yesterday should provide welcome relief to some frontier markets such as Ghana and Kenya that still face very high foreign borrowing costs. But it won’t solve the underlying problems in EMs where debt dynamics look unsustainable, such as Tunisia and Argentina.

3 August 2021
More Publications

Delta threat building

The highly contagious Delta variant of COVID-19 seems to be dominant now across much of Sub-Saharan Africa and is driving new waves in many of the large economies. South Africa appears to be over the worst of its latest outbreak, although it now has to contend with the legacy of violence and unrest earlier this month. Elsewhere, cases are rising quickly and could dampen recoveries. Extremely low vaccine coverage makes the region particularly vulnerable to this variant and potential future ones. Even in South Africa, where the rollout is quick by regional standards, at the current pace it would take a year for vaccine coverage to reach the levels offering protection against new variants seen in DMs.

Ghana’s cocoa boom, core inflation still low in S. Africa

Optimism is growing about a potential bumper cocoa harvest in Ghana, which could boost exports by more than 1% of GDP and presents an upside risk to our above-consensus growth forecasts. Meanwhile, although South African inflation hit a multi-year high in May, the weakness of core inflation suggests that it won’t join the EM tightening cycle soon.

Third wave fears grow

Worries about a third wave of COVID-19 in the region have intensified in the past month and the tightening of lockdown measures in some countries – most notably South Africa – will weigh on recoveries. As things stand, surges in cases appear concentrated in countries in the south of the continent; cases have trended down in many of the region’s other large economies (e.g. Nigeria, Ghana and Ethiopia). With vaccine rollouts progressing at a snail’s pace amid low supplies across the region, fresh virus outbreaks will remain a persistent threat to the outlook. The glimmer of hope is that global powers are looking to increase vaccine supplies and, perhaps most importantly, China could be in a position to flood the world with easily-deployable jabs later in the year.

SA tightens virus curbs, Ghana surprises with rate cut

The recent tightening of containment measures to curb South Africa’s third virus wave will probably not be as damaging for the economy as earlier rounds of restrictions. Even so, the prospect of further waves and other headwinds will weigh on the recovery. Meanwhile in Ghana, policymakers delivered a surprise interest rate cut this week, but that is unlikely to be followed by further easing in Ghana or elsewhere in the region.

Oil producers heading into deeper crises

The plunge in global oil prices has raised the risk of much steeper contractions in output in African oil producers, sharper currency falls, sovereign debt restructurings and problems at local banks.

1 to 8 of 60 publications
See More ↓