Revisiting the problems at Eskom

Problems at South Africa’s state electricity firm, Eskom, are an increasingly painful thorn in the side of the economy with higher tariffs and an overhaul of the firm’s finances needed to put it on a sustainable footing and upgrade the country’s energy infrastructure. Liberalising the electricity sector and attracting private investment would also help but will probably run into opposition from powerful trade unions.
Jason Tuvey Senior Emerging Markets Economist
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Africa Economics Weekly

Ghana struggling with debt, oil price winners and losers

The sharp rise in Ghana’s sovereign dollar bond yields this month suggests that investors are coming around to our view about the country’s worrying debt trajectory. Meanwhile, the rebound in oil prices will, as usual, split Sub-Saharan African economies into winners and losers. But the region’s oil producers will probably not be able to reap the full benefits from higher prices.

22 October 2021

Africa Economics Update

Oil woes to hold back recoveries in Angola & Nigeria

Falling oil production has weighed on the Nigerian and Angolan economies, with the latter likely to suffer its sixth consecutive annual decline in GDP this year. While output should rise next year, we doubt that either will be able to meet its OPEC+ quota, preventing faster recoveries from taking hold in 2022.

21 October 2021

Africa Data Response

South Africa Consumer Prices (Sep.)

Although South Africa’s headline inflation rate picked up to 5.0% y/y in September, soft underlying price pressures and a fragile economic recovery mean that policymakers will only normalise monetary policy gradually. By contrast, investors currently appear to expect a relatively aggressive tightening cycle.

20 October 2021

More from Jason Tuvey

Emerging Europe Economics Update

Turkey’s inflation risks mount, CBRT to delay rate cuts

Turkish inflation hit a two-year high in June and recent domestic energy price hikes will cause it to rise even further over the next couple of months. High inflation and signs of a quick recovery from May’s lockdown mean that the central bank will probably delay the start of its easing cycle until later this year. We now expect the one-week repo rate to be lowered to 17.00% by end-2021 (previously 14.00%).

7 July 2021

Emerging Europe Data Response

Turkey Consumer Prices (Jun.)

The fresh rise in Turkey’s headline inflation rate to 17.5% y/y in June, coupled with signs of a strong rebound in activity after May’s three-week lockdown, means that an interest rate cut in the next couple of months is increasingly unlikely. An easing cycle is now more likely to commence later this year when inflation looks set to fall sharply.

5 July 2021

Emerging Europe Economics Weekly

Turkey dollarisation, Ukraine-IMF, Russia & Poland rates

Turkey’s central bank took steps this week to tackle deposit dollarisation in the banking sector, although these efforts will fail to make headway in the absence of a stronger commitment to rein in high inflation. Meanwhile, Ukraine’s government still has work to do to secure the next tranche of its IMF loan, but the economy can muddle through without help from the Fund for some time. Finally, other developments this week suggest that Poland’s central bank may stick to its recent dovish rhetoric while Russia looks like it could accelerate the pace of monetary tightening.

2 July 2021
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