Risk premia have fallen across the region over the past month. In the region’s largest economy, Nigeria, that has come on the back of a marked policy shift since President Tinubu took office in late-May. Costly fuel subsidies have been removed and the naira has been devalued. Elsewhere, policymakers’ commitment to fiscal consolidation (Kenya), easing geopolitical tensions (South Africa) and progress in debt restructuring talks (Zambia and Ghana) have played a role. That said, we expect global risk appetite to worsen over the coming months as advanced economies slip into recession. And any signs of fiscal slippage across Africa could cause debt fears to flare up again.
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