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South African politics: intra-ANC balance tilting The suspension of Ace Magashule, the Secretary General of South Africa’s ruling ANC party is likely to go some way in strengthening the hand of President Cyril Ramaphosa in an intra-party fight. But the …
7th May 2021
Recently released survey data from South Africa point to a marked improvement in economic conditions but there were further signs that firms are suffering from supply chain disruptions. What’s more, we think that the slow vaccine rollout and fiscal …
5th May 2021
Ripple effects from India’s virus wave India’s unabating second virus wave risks further delays to vaccine exports through the Covax initiative to much of Sub-Saharan Africa, which would set back economic recoveries further. South Africa seems somewhat …
30th April 2021
The sharp rises in copper and iron ore prices this month will have given a much-needed boost to African producers such as Zambia and South Africa. Gold also traded higher in April compared to March, supporting recoveries in the likes of Côte d’Ivoire, …
29th April 2021
Overview – Slow vaccine rollouts, tight fiscal policy and weakness in tourism sectors will hold back recoveries across Sub-Saharan Africa. Virus containment measures will probably remain in place for some time, depressing activity. Meanwhile, some …
28th April 2021
Tussle over wages in South Africa Trade unions are ramping up the pressure on South Africa’s government and state-owned enterprises to increase salaries yet austerity plans hinge on a public sector wage freeze. The credibility of the government’s …
23rd April 2021
Rising energy inflation masks weak core price pressures South Africa’s headline inflation rate crept up to 3.2% y/y in March but this was almost entirely due to energy price effects that will become more pronounced this quarter. In contrast, underlying …
21st April 2021
South Africa: A series of unfortunate vaccine events The announcement this week that South Africa is suspending the roll-out of Johnson&Johnson vaccines, on which it heavily relies, risks further delaying an already slow vaccine campaign. The news follows …
16th April 2021
Soaring inflation to increase pressure on policymakers to hike The latest jump in Nigerian inflation, to 18.2% y/y in March, will probably reinforce the views of the hawkish minority on the central bank’s MPC. Our base case is that the majority of MPC …
15th April 2021
South Africa’s hard activity data for February show that the recovery resumed following a January slump on the back of a second virus wave. While the economy will probably finish Q1 on a stronger note, we think that major headwinds will weigh on activity …
14th April 2021
The COVID-19 crisis has caused bad loans at South Africa’s banks to rise, but the impact so far has not been as bad as feared. That said, the hit to profitability in the banking sector, combined with an apparent reluctance among households and firms to …
SDRs & DSSI: a bit more breathing space A flurry of global action this week to help improve low-income countries’ balance sheets is likely to provide only short-term relief and, in the meantime, efforts to provide longer-lasting help to debt distressed …
9th April 2021
The road to recovery in South Africa’s manufacturing sector will probably be slow and bumpy. Weak domestic demand and persistent power cuts will act as key headwinds, although export-oriented sectors are likely to benefit from a continued rebound in …
8th April 2021
Pulling back the curtain on debt risks in Africa Leaders of several multilateral organizations have warned about debt risks in developing countries. Such vulnerabilities are high in much of Sub-Saharan Africa, but immediate debt risks are probably …
1st April 2021
PMI jumps, but recovery still faces key headwinds The sharp rise in South Africa’s manufacturing PMI in March suggests that the sector bounced back quickly as virus containment measures were eased. But the recovery will continue to be held back by a slow …
Central banks in Sub-Saharan Africa bucked a recent “trend” of interest rate hikes in other emerging markets this month. Policymakers in South Africa, Nigeria, Kenya and Angola all kept their benchmark rates unchanged. The backdrop of rising US Treasury …
30th March 2021
SA Reserve Bank nowhere near a hawkish pivot South Africa’s monetary policy stance is likely to remain accommodative for some time, going against market expectations and the projection model of the Reserve Bank (SARB). This week’s decision to keep the …
26th March 2021
Policymakers in South Africa kept their benchmark rate unchanged at 3.50% today, breaking a recent wave of EM central bank decisions to tighten policy. We suspect that the country’s weak economic recovery and subdued inflation means that policy will stay …
25th March 2021
Soft inflation reading another reason to expect Reserve Bank to hold The fall in South Africa’s headline inflation rate, to 2.9% y/y, in February almost certainly rules out a hike in interest rates at Thursday’s MPC meeting. We think that the repo rate …
24th March 2021
Policymakers in Nigeria opted to keep their benchmark rate unchanged at 11.50% at today’s MPC meeting in the face of rising inflation and a weak recovery. We don’t think that a hawkish minority will turn into a majority in the coming months and, if …
23rd March 2021
Nigeria lying in economic bed policymakers made The past week has brought further evidence that Nigeria is suffering from stagflation and we suspect it’s a ‘chronic condition’ arising from poor policy choices rather than an ‘acute disease’. Price …
19th March 2021
South Africa’s Reserve Bank (SARB) is unlikely to be in a rush to follow other EM central banks in tightening monetary policy. We think the policy rate will be on hold this year and probably in 2022 too. This week has seen central banks in Brazil, Russia …
Nigeria’s budget deficit is set to narrow sharply this year as oil revenues increase and the government fails to meet ambitious capital spending plans. The shortfall should be easily covered by domestic borrowing but, if we’re right in expecting oil …
South Africa’s hard activity data for January show that virus-related restrictions meant that the economy started the year on a very weak footing. We think that the recovery will struggle to gain much momentum over the coming months. Activity data …
17th March 2021
Record-high food inflation pushing up headline rate The latest jump in Nigerian inflation, to 17.3% y/y in February is unlikely to prompt the central bank to tighten monetary policy as concerns about a weak recovery mount. Figures released today showed …
16th March 2021
Sub-Saharan Africa back to bond markets African policymakers seem to be turning increasingly to international bond markets to finance budget deficits this year. Last November, Côte d’Ivoire became the first country in Sub-Saharan Africa to issue sovereign …
12th March 2021
Tighter virus containment measures imposed in late-2020 in South Africa weighed on manufacturing and mining output in January. We think that industrial activity picked up more recently, but the recovery will be held back by power cuts, a slow vaccine …
11th March 2021
Even as Sub-Saharan Africa gradually opens its doors to visitors, tourism sectors in the region face serious hurdles and we think that African economies dependent on the industry may be one of the slowest to recover from the coronavirus crisis. Tourism …
10th March 2021
Recovery losing momentum The slowdown in the pace of South Africa’s recovery in Q4 was less sharp than expected, but the economy is unlikely to gather much momentum over the coming quarters and we still expect GDP to be around 2% below its pre-virus trend …
9th March 2021
SA: Easing lockdown to lift stranded economic boat Improving virus numbers allowed South Africa to ease containment measures this week, which is likely to inject much-needed momentum into the recovery. As of 1 st March, South Africa moved from lockdown …
5th March 2021
The reported (but unconfirmed) devaluation of one of Nigeria’s exchange rates would help to improve the public finances, but it would keep already strong price pressures elevated. We doubt that the latest tweak in Nigeria’s FX market will culminate in a …
3rd March 2021
South Africa’s economic pain easing The rise in South Africa’s manufacturing PMI in February suggests that the economy bounced back from around the turn of the year, and the recent easing of lockdown measures should support activity this month. But slow …
1st March 2021
South Africa: reading behind budget lines Finance Minister Tito Mboweni appears to have put rose-tinted glasses on when he delivered South Africa’s budget this week. We noted that, despite repeatedly claiming that the 2021 blueprint was not an austerity …
26th February 2021
The recent rally across almost all commodity prices is good news for resource-rich economies in Sub-Saharan Africa. Balance sheets in oil producing countries like Nigeria and Angola will get a boost from the pick-up in oil prices. And a surge in …
The South African 2021 budget unveiled today was anything but the “non-austerity” budget that Finance Minister Tito Mboweni claimed he was presenting. Indeed, the fiscal plans imply significant tightening and will, if implemented, stabilise the public …
24th February 2021
SA budget the first test of austerity commitment All eyes will be on Finance Minister Tito Mboweni when he delivers South Africa’s budget speech next Wednesday for any changes in the government’s fiscal consolidation plans. The poor public finances leave …
19th February 2021
Oil and non-oil sectors diverge as economy rebounds Nigeria’s Q4 GDP data showed that a poor performance in the oil sector was more than offset by a continued rebound in the non-oil economy. While we think that some of the headwinds facing the economy …
18th February 2021
South Africa’s hard activity data for December suggest that the economy avoided contraction in Q4, but the pace of the recovery slowed and is likely to remain weak. Activity data published by Stats SA today showed that, following a 4.0% y/y fall in …
17th February 2021
Inflation edges up and set to rise further, but SARB to stand pat The rise in South Africa’s headline inflation rate, to 3.2% y/y in January, is likely to be followed by further increases over the next few months but, with the economic recovery still …
Inflation rises again, but CBN in no mood to tighten policy The latest jump in Nigerian inflation, to 16.5% y/y in January, on the back of surging food price pressures, is likely to increase pressure on the central bank (CBN) to tighten monetary policy. …
16th February 2021
AstraZeneca vaccines in Africa: to jab or not to jab? Disappointing news from an AstraZeneca trial will further complicate vaccination campaigns across Sub-Saharan Africa. But heavy reliance on this jab is limiting policymakers’ alternative options. The …
12th February 2021
The upside surprise in South Africa’s mining and manufacturing output in December is unlikely to be repeated in early 2021. Tighter virus containment measures and continued power cuts probably mean that the pace of the recovery has slowed. Activity data …
11th February 2021
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 …
10th February 2021
Disappointing vaccine developments mean that policymakers in Africa could be forced to keep restrictions on activity in place for longer, delaying economic recoveries and deepening scarring effects. Many Sub-Saharan African economies have endured second …
8th February 2021
Debt restructuring “wave” more of a ripple Zambia has become the latest country – after Chad and Ethiopia – to seek debt restructuring under the G20’s Common Framework, but tough negotiations lie ahead and few other countries are likely to go down a …
5th February 2021
Economy not out of the woods The rise in South Africa’s manufacturing PMI in January appears to hide underlying weakness in activity on the back of virus-related restrictions. Even with some signs of a break in the clouds over South Africa’s economy, we …
1st February 2021
Kenya: more room for fiscal manoeuvre? Policymakers in Kenya appear to be exploring options to open up fiscal space to boost the recovery, seemingly with the IMF’s blessing. It is not entirely clear what central bank governor Patrick Njoroge was referring …
29th January 2021
Governments across Sub-Saharan Africa seem to have mixed plans for fiscal policy this year. There are signs that policymakers in some countries – including Nigeria, Ghana and perhaps Kenya – will continue to provide stimulus in 2021, reducing the risk of …
28th January 2021
Overview – The second waves of COVID-19 currently ripping through Sub-Saharan Africa will keep economic activity depressed over the coming months and, even once vaccines belatedly reach the region, recoveries will remain sluggish. The three largest …
The recent rise in inflation appears to have stayed the hand of Nigeria’s central bank from delivering more monetary easing at today’s MPC meeting. But, as price pressures drop back towards the end of this year, we think that policymakers will lower the …
26th January 2021
