African downturn and recovery paths to diverge

Low-profile data suggest that the economic damage caused by lockdowns in some of the poorer economies in Africa will be more moderate than in higher-income countries. But the economic pain could be more protracted in the former group of countries as they struggle to contain the virus.
Virag Forizs Emerging Markets Economist
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Africa Economics Weekly

‘BIG’ push in SA, FX distortions in Nigeria, tourism woes

Momentum behind proposals for a basic income grant (BIG) in South Africa appear to be building, suggesting that the authorities are leaning towards providing more fiscal support. Elsewhere, Nigeria’s unorthodox foreign exchange policy seems to be disrupting activity but the chances of policymakers reversing course are very low. Finally, a recent virus wave in the highly-vaccinated island nation of Mauritius has dampened its recovery prospects, but other tourism-dependent economies in Africa will probably fare even worse.

17 September 2021

Africa Economics Update

CBN maintains interest rates and disruptive FX rules

Policymakers in Nigeria kept their benchmark rate on hold at 11.50% at today’s MPC meeting and will probably continue to do so over 2021-23. And the central bank’s insistence on maintaining a strong currency using disruptive foreign exchange rules is likely to come at an increasingly high economic cost.

17 September 2021

Africa Economics Update

SA to struggle to get back on economic feet after July hit

South Africa’s hard activity data for July underscored the severe blow to the retail and manufacturing sectors from violent unrest and tighter virus restrictions. While much of the hit has probably unwound more recently, weak growth momentum increases the risk of a contraction in GDP over Q3 as a whole.

15 September 2021

More from Virag Forizs

Africa Data Response

Nigeria Consumer Prices (May)

The second consecutive drop in Nigeria’s headline inflation rate, to 17.9% y/y in May, will probably go some way towards easing policymakers’ recent concerns about high and rising inflation. While we expect inflation to remain well above the central bank’s target for the foreseeable future, the MPC is likely to keep interest rates unchanged over the coming years.

15 June 2021

Africa Economics Focus

The perils of deficit monetisation in Nigeria

Nigeria’s government has turned to the central bank to plug ever larger budget deficits in recent years and policymakers are unlikely to kick their deficit monetisation habit, particularly if the fiscal position worsens next year (as we expect). This will deepen some of Nigeria’s existing economic woes, including high inflation, downward pressure on the naira and weak economic growth.

14 June 2021

Africa Economics Weekly

Filling gaps: vaccine supply in SSA & electricity in SA

Leaders of G7 nations meeting this week are ramping up efforts to provide more vaccines to the developing world, which – along with the prospect of larger supplies from China – could give a lift to struggling inoculation campaigns and economic recoveries in Africa. Meanwhile, South Africa announced further steps to address its chronic electricity supply problem that has long weighed on the economy, but the measures will probably take some time to bear fruit.

11 June 2021
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