The Nigerian naira’s latest devaluation has taken it closer to fair value and, with investor sentiment towards Nigeria improving, the government is lining up a fresh Eurobond sale. That may help to plug the budget deficit but a rising share of FX-denominated debt leaves the public finances on a shakier footing. Elsewhere, South Africa’s banks are reporting higher impairments on their loans, which is likely to prompt a tightening of credit conditions that weighs on growth. Meanwhile, the South African government’s decision to increase the Social Distress Relief (SDR) grant further undermines the credibility of the fiscal plans outlined in the 2024 Budget.
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