Africa

Nigeria

‘BIG’ push in SA, FX distortions in Nigeria, tourism woes

Momentum behind proposals for a basic income grant (BIG) in South Africa appear to be building, suggesting that the authorities are leaning towards providing more fiscal support. Elsewhere, Nigeria’s unorthodox foreign exchange policy seems to be disrupting activity but the chances of policymakers reversing course are very low. Finally, a recent virus wave in the highly-vaccinated island nation of Mauritius has dampened its recovery prospects, but other tourism-dependent economies in Africa will probably fare even worse.

17 September 2021

CBN maintains interest rates and disruptive FX rules

Policymakers in Nigeria kept their benchmark rate on hold at 11.50% at today’s MPC meeting and will probably continue to do so over 2021-23. And the central bank’s insistence on maintaining a strong currency using disruptive foreign exchange rules is likely to come at an increasingly high economic cost.

17 September 2021

Nigeria Consumer Prices (Aug.)

The drop in the headline inflation rate in Nigeria, to 17.0% y/y in August was, once again, driven by easing food price pressures, although core inflation also eased. This is likely to reassure policymakers and we expect the benchmark rate to remain unchanged this month and beyond.

15 September 2021
More Publications

OPEC Monthly Oil Market Report (Sep.)

The rise in OPEC’s oil output fell well short of its target in August. And given a higher oil demand forecast for 2022, alongside growing external pressure, we think that the risks are tilting towards a faster relaxation of the group’s collective output cut in the year ahead.

The pandemic and EM scarring risks

The pandemic is likely to inflict lasting damage on potential growth in economies in much of Latin America, Africa and South and Southeast Asia, adding to the structural headwinds that they already faced. However, the risk of permanent scarring in many other emerging markets – including much of East Asia and Emerging Europe – is overstated.

Pandemic not in the rear-view mirror for some time

The economic damage from the latest COVID-19 waves across Sub-Saharan Africa appears to be smaller compared to previous waves, but low vaccination rates mean that officials will have to keep containment measures in place for longer than elsewhere. This will hold back recoveries and prevent international travellers from returning quickly – a particular problem or countries like Kenya and Namibia.

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.

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.

1 to 8 of 199 publications
See More ↓