Remarks this week from SARB Governor Kganyago increase the chances of interest rates in South Africa staying high for longer, particularly if fiscal risks build ahead of the election. Kenya, meanwhile obtained an enhanced IMF deal. This forms part of a multi-pronged approach, including securing external financing from elsewhere and negotiating a debt-for-social swap, as the government seeks to meet a Eurobond repayment in June. Still, to avoid default further ahead, it will also need to keep fiscal policy tight. Finally, Nigeria is seeking another World Bank loan to increase dollar liquidity and stabilise the naira. This will not be sufficient and the government needs to push ahead with orthodox monetary and FX reforms.
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