The passing this week of Raila Odinga, a prominent politician in Kenya, is likely to result in his party being less committed to the governing alliance with President Ruto’s United Democratic Alliance, raising the risk of political instability in the coming months. Even if that is avoided, Ruto’s government is turning away from fiscal consolidation as the 2027 elections come into view, meaning that sovereign default risks will continue to linger. Meanwhile, the latest slump in oil prices will be welcomed by the region’s energy importers. It will lead to strains in Angola’s economy but it is unlikely to be major problem for Nigeria, where the stability of the naira and falling inflation leave the door open for further large interest rate cuts.
On Nigeria, we’ll be discussing what President Tinubu’s reform drive has achieved so far, the policy risks coming into view, and the outlook for Nigeria’s economy and financial markets in a Drop-In next week. Sign up here.
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