El Niño is causing severe drought across much of southern Africa, which is likely to weigh on GDP, push up inflation and strain balance sheets. South Africa has also suffered water shortages, albeit more as a result of creaking infrastructure than low rainfall. But over the longer run, it too will face increasing water stress from the effects of climate change. More immediately, South Africa’s recent water shortages may further dent support for the ANC ahead of the upcoming election.
In view of the wider interest, this Africa Economics Update is also being sent to clients of our Climate Economics Service.
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