Filtered by Subscriptions: Africa Economics Use setting Africa Economics
Lingering fiscal risks in South Africa, alongside the challenging global backdrop, prompt us to expect a dim outlook for the country’s bonds, equities and the rand over the rest of this year. The negative reaction in markets to rumours that South Africa’s …
18th March 2025
SA 2025 Budget: will a compromise be reached? South Africa’s budget was finally delivered this week, but without the DA’s support. There are enough reasons to think that a compromise within the GNU will eventually be brokered, but it will still need to …
14th March 2025
South Africa’s 2025 Budget speech was (finally) delivered but it’s not at all clear whether the plans will be approved given the DA’s opposition to the proposed VAT hike. We think there is more horse trading to be done, with Finance Minister Godongwana …
12th March 2025
Kenya’s 2025/26 budget has set out ambitious revenue-raising plans that we think will be tough to achieve and some fiscal slippage is inevitable. The result is that, in the absence of further fiscal consolidation efforts, Kenya’s public debt-to-GDP ratio …
Rand makes gains, but for how long? The rand rallied this week on the news that South Africa’s current account deficit narrowed in 2024, but it remains vulnerable to depreciation given that the terms of trade are set to worsen, and the stability of the …
7th March 2025
The events of the past two weeks have called into question whether the US is severing ties not just with adversaries such as China but also allies, including Canada, Mexico and the European Union. This would radically alter the shape of the fractured …
4th March 2025
End-year rebound sets stage for stronger 2025 The 0.6% q/q rebound in South Africa’s economy in the final quarter of last year came on the back of an upwardly-revised 0.1% q/q contraction in Q3 and suggests that the recovery is back on track. We expect …
No sign yet of SA budget dispute being resolved There’s now less than two weeks until South Africa’s Finance Minister Enoch Godongwana (finally) delivers the 2025 Budget. But the past few days have only further underlined the widening divide between the …
28th February 2025
The threat of lower oil prices and the Angolan government’s apparent reluctance to push through (further) fiscal consolidation measures has raised the risk that it will be the next African sovereign to default on its debt. If that transpires, large debts …
27th February 2025
Softer price pressures pave the way for further rate cuts The smaller-than-expected increase in South Africa’s headline inflation rate, to 3.2% y/y, supports our view that the Reserve Bank can press ahead with its easing cycle over the coming months. The …
26th February 2025
Growth picks up, recovery to continue in 2025 Nigeria recorded a further pick-up in GDP growth to 3.8% y/y in Q4 of last year and, with inflation and interest rates set to fall sharply, we expect the recovery to continue over the coming quarters. The …
25th February 2025
SA Budget: GNU coalition under strain South Africa is still reeling from this week’s surprise last minute Budget postponement and concerns about divisions within the GNU are likely to rise. We set out our initial thoughts to the delay in a Rapid Response …
21st February 2025
Rates on hold, CBN to turn to easing soon The Central Bank of Nigeria confirmed today that its tightening cycle was at an end by leaving the policy rate at 27.50% today, and we think its attention will quickly turn to rate cuts, probably beginning in May …
20th February 2025
The eleventh-hour unprecedented postponement of South Africa’s 2025 Budget due to disagreements within the Government of National Unity on tax policy, suggest that it is domestic rather than foreign policy where the cracks in the coalition lie. The delay …
19th February 2025
South Africa’s hard activity data for December were generally disappointing but it’s still likely that the economy rebounded in Q4 of last year following a surprise contraction in Q3. We expect the recovery to continue this year and have pencilled in …
The decision by the US and Russia to “lay the groundwork” to end the war in Ukraine marks a potentially significant turning point after three years of conflict. Negotiations will take time and the macroeconomic implications will depend on the features of …
18th February 2025
Nigeria’s headline inflation rate came in at 24.5% y/y in January after the national statistics office made substantial methodological changes and, while we do not yet have the full information to predict the exact path for inflation going forward, fading …
SA 2025 Budget: Fiscal trade-offs to get harder In South Africa, the Treasury will face a difficult balance act in recommitting to fiscal while also appearing pro-growth in next week’s 2025 budget presentation. South Africa Finance Minister Enoch …
14th February 2025
Africa Chart Pack (Feb. 2025) …
13th February 2025
President Ramaphosa used his State of the Nation Address (SONA) yesterday to recommit to fiscal discipline and investment-led growth. The rebuke of the US in his speech was noticeable, suggesting Trump’s recent actions could act to push South Africa …
7th February 2025
After last month’s shock postponement, South African Finance Minister Enoch Godongwana is finally expected to present a 2025 national budget on 12th March. But the ANC and DA have been arguing about fiscal plans, and we think Mr Godongwana faces a …
Mozambique’s post-election woes are mounting after another reported delay to one of its key natural gas projects. And this has led to increasing talk that the government may seek to restructure its debt pile. If sovereign default was to occur, the lesson …
6th February 2025
The threat by President Trump to cut funding to South Africa due to the controversial land expropriation bill will (if implemented) have limited direct economic effects. The bigger concern is that the threat will create tensions within the ruling …
3rd February 2025
South Africa’s tough love on SOE’s unlikely to last South Africa’s SOEs have received tough love recently, hurt by a reluctant government trying to keep the public on side and public finances in check. Eventually, we think unpopular decisions will need to …
31st January 2025
The South African Reserve Bank decision to cut its repo rate by 25bp, to 7.50%, was widely expected but Governor Kganyago was more hawkish than anticipated, citing concern about US tariff threats and the prospects of the rand weakening further. On the …
30th January 2025
Africa Chart Pack (Jan. 2025) …
Nigeria becomes BRICS latest partner country We think Nigeria’s recent admittance as the BRICS’s latest “partner” member adds to the evidence that the government is trying to straddle the geopolitical divide between US- and China-led blocs. After being …
24th January 2025
South Africa’s activity data for November points to a strong end to last year, underpinned by the mining and retail sectors. We think GDP will expand by an above-consensus 2.3% in 2025. The retail sales data released today showed that the sector continued …
22nd January 2025
Inflation edges up but SARB to continue with cuts in 2025 The smaller-than-expected rise in South Africa’s headline inflation rate, to 3.0% y/y, in December, combined with the recent recovery in the rand, supports our view that the SARB can continue with …
Dovish SARB on the cards even with weak rand The rand’s recent weakness has raised worries in the market that the SARB’s easing cycle will slow. While the risks to our forecast for the repo rate are certainly tilted to the upside, we still think a …
17th January 2025
The Shape of the Fractured World in 2025 The share of the fracturing global economy that is accounted for by China and its geopolitical allies contracted in 2024, leaving it under a third the size of the US bloc at the start of 2025. This fall was in part …
Six months since its formation, South Africa’s Government of National Unity (GNU) has fostered a lot of goodwill in the market. Loadshedding is seemingly a thing of the past, logistics constraints have eased, and the fiscal position has improved. But …
16th January 2025
Increase in inflation may push CBN to deliver one last 25bp hike The further rise in Nigeria’s headline inflation rate, to 34.8% y/y in December, raises the risk that the central bank pushes ahead with one last interest rate hike at their next meeting in …
15th January 2025
Mozambique and the return of Mondlane Post-election unrest in Mozambique threatens to re-escalate with Daniel Chapo set to be inaugurated as the country’s next president on Wednesday and opposition leader Venâncio Mondlane returned to the country this …
10th January 2025
We think Nigeria’s interest rate hiking cycle is over. The CBN is likely to be confident that moderating petrol prices and a more stable naira will quickly see the disinflation process resume. Still, we think the CBN will be wary of the inflationary risks …
8th January 2025
The Cold War was defined by geopolitical blocs – the Soviet or Eastern bloc against the Western bloc. Geopolitics retreated with the collapse of the Soviet Union. The period from the early-1990s to the early-2010s was instead an era of globalisation: most …
7th January 2025
Donald Trump’s second term could redraw the global geopolitical map. A sustainable “Grand Bargain” with China, warmer relations with Russia, or a breakdown in the relationship between the US and its traditional allies could each reshape supply chains and …
Nigeria: more rate hikes not a done deal Nigeria’s headline inflation rate crept up further in November, but we’re not convinced that this will prompt the central bank to deliver more rate hikes. Figures released on Monday showed that Nigeria’s headline …
20th December 2024
Africa Chart Pack (Dec. 2024) …
18th December 2024
Overview – Falling inflation and looser monetary policy will help GDP growth to accelerate across Sub-Saharan Africa next year. A shift towards trade protectionism in the US will hurt certain sectors in certain countries, but is unlikely to have a …
17th December 2024
South Africa October activity data point to recovery While data out this week showed renewed struggles in South Africa’s mining sector, other figures suggest that a recovery has taken hold in Q4. The retail sector recorded a 1.6% m/m gain in October, more …
13th December 2024
Inflation in South Africa is now running at extremely low rates by historic standards. While we think it will edge up from here, the extent of spare capacity in the economy and tight fiscal stance mean inflation will remain lower than consensus …
Softer-than-expected inflation points to further SARB cuts in 2025 The smaller-than-expected rise in South Africa’s headline inflation rate, to 2.9% y/y, in November, coupled with the surprise contraction in GDP in Q3, means that the monetary policy …
11th December 2024
South Africa GDP miss to be followed by rebound The 0.3% q/q fall in South Africa’s GDP in Q3 was disappointing, but it was largely driven by a slump in agriculture that should unwind. Along with low inflation and continued monetary easing, we expect the …
6th December 2024
The main presidential candidates and their parties in Ghana’s upcoming election appear to be committed to restoring fiscal discipline and getting inflation under control. That said, the opposition NDC, which currently appears on course to take power, is …
3rd December 2024
Surprise contraction, but things not so bad under the hood South Africa’s economy recorded a surprise contraction of 0.3% q/q in Q3, but that was largely due to a steep decline in agricultural output. The rest of the economy held up much better and we …
CBN makes case inflation close to peaking Central Bank of Nigeria Governor Yemi Cardoso set out the case at this week’s MPC meeting for inflation to slow down, suggesting that officials are eyeing the end of the tightening cycle. The CBN’s …
29th November 2024
We held an online session on US import tariffs on 26th November. (See a recording here ). In this Update we answer the questions we were most asked. What are Trump’s motives for threatening tariffs and will he follow through? Trump has spoken about using …
Africa Chart Pack (Nov. 2024) …
27th November 2024
25bp hike probably the last of this cycle The Central Bank of Nigeria opted for a smaller-than-expected hike in its policy rate of 25bp to 27.50%, at its meeting today and, with Governor Cardoso sounding optimistic that the effects of petrol price hikes …
26th November 2024
