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Activity figures for March were stronger than those for February, but it still looks almost certain that South Africa’s economy contracted in Q1. Conditions seem to have improved in April, and we think that growth over the year as a whole will pick up a …
9th May 2019
President Cyril Ramaphosa’s ANC is all-but certain to win this week’s election, but we’re sceptical that this will provide impetus to his sluggish reform drive. The ruling party will, after all, remain sharply divided. We expect that progress will be …
6th May 2019
We doubt that next week’s South African election will do much to boost President Cyril Ramaphosa’s reform drive. Elsewhere, Kenyan officials released a first draft of next year’s budget, with the figures supporting our view that the fiscal deficit will …
3rd May 2019
South Africa’s manufacturing PMI rose to 47.2 in April, providing a rare reason for optimism about the sector. This supports our view that economic conditions will strengthen in Q2. … South Africa Manufacturing PMI …
2nd May 2019
Figures released this month added to the evidence that African economies are struggling this year. The worst news was from South Africa and Angola, where recent activity data suggest that GDP actually fell in Q1. We also received very bearish signals from …
30th April 2019
The latest figures show that Kenya’s economy accelerated in 2018, but a worsening drought will cut growth this year. Elsewhere, a second cyclone is hitting Mozambique, dealing another blow to the country’s fragile economy. We published a new report on …
26th April 2019
PM Abiy Ahmed’s political and economic reforms have drawn attention to Ethiopia’s huge potential. But the process remains fragile and could easily be reversed. Developing a private sector-led development model will require a delicate combination of …
Soft inflation readings across Africa this week supported our view that policymakers will cut rates in key economies. New figures added to the evidence that South Africa stumbled in Q1, while Nigerian policymakers tried (and, in our view, failed) to …
18th April 2019
Retail sales figures for February added to the evidence that South Africa’s economy struggled in the first months of the year. Growth will probably pick up later this year, but it will remain weak, adding to the pressure for interest rate cuts. … South …
17th April 2019
Inflation in South Africa picked up to 4.5% y/y in March due to petrol prices, but we think that it will soon ease. We’re sticking to our non-consensus view that policymakers will cut late this year. … South Africa CPI …
As CBN Governor Godwin Emefiele’s term draws to a close, we’ve taken a look at how his controversial decisions worsened Nigeria’s recent economic crisis. Given President Muhammadu Buhari’s views on monetary policy, Mr. Emefiele’s replacement is unlikely …
16th April 2019
Inflation in Nigeria remained strong in March, and will probably stay above target over the coming months. Even so, we expect that will probably continue their controversial loosening cycle. … Nigeria CPI …
Activity data out this week added to the evidence that South Africa’s economy faltered in Q1. As we argue in our latest Outlook , problems in South Africa are a key reason why we think that regional growth will disappoint this year. Elsewhere, Mozambican …
12th April 2019
Economic growth across Africa as a whole will remain weak in 2019 due to very poor performances from Nigeria and South Africa. Conditions will probably improve next year, but regional growth will be weaker than most analysts expect. We think that East …
11th April 2019
The latest activity figures add to the evidence that growth in South Africa softened at the start of 2019. Conditions will probably pick up later in the year, but growth will remain tepid. … South Africa: Activity data point to weak …
Moody’s Ratings delayed the review scheduled for last Friday, leaving South Africa’s rating unchanged. Two new developments this week added to concerns about the country’s fiscal health. That said, we think fears that a downgrade would create serious …
5th April 2019
Rebounds in agricultural production will help to support economic accelerations this year in Kenya and South Africa. Elsewhere in Southern & Eastern Africa, however, the sector will drag on growth – particularly in Zambia and cyclone-hit Mozambique. … …
4th April 2019
Nigeria’s fiscal position is much weaker than widely believed. Government plans to focus on foreign borrowing will add to currency risk. And evidence suggests that the central bank is helping to finance the deficit, raising the risk of higher inflation …
3rd April 2019
South Africa’s manufacturing PMI slipped again in March, suggesting that power cuts and soft demand weighed on the sector. Though the measure has a tendency to overstate the weakness of manufacturing, today’s reading is another reason to expect soft …
1st April 2019
The upcoming Moody’s review of South African debt has raised fresh concerns about a sell-off in the country’s bond market. But we think that these fears are overdone. Meanwhile, central bank meetings this week reinforced our view that policymakers are …
29th March 2019
The South African Reserve Bank’s (relatively) dovish post-meeting communications support our view that the next move in interest rates will be down (probably in early 2020). The markets have moved towards our view and no longer expect hikes, but they …
28th March 2019
Figures released over the past month added to concerns that Africa’s largest three economies stumbled in early 2019. There was, admittedly, some good news from Kenya, where judges struck down a cap on commercial lending rates that had depressed the growth …
27th March 2019
Today’s rate cut was another signal that Nigerian policymakers are prioritising monetary stimulus over their own inflation target. We doubt that this cut – which will probably be the first in a cycle – will do much to boost growth. But it will further …
26th March 2019
South African retail sales figures released this week provided another sign of economic weakness, and worsening electricity problems will add to economic headwinds. A new budget report has raised fresh concerns about the financing of Nigeria’s fiscal …
22nd March 2019
Retail sales growth picked up in January, but activity data across the economy as a whole were weak at the start of 2019. Growth will probably remain subdued over Q1, but then strengthen later in the year. … South Africa: Growth faltered in early …
20th March 2019
South African inflation stayed low in February, and while it will probably pick up over the coming months, it will remain within target. We hold the non-consensus view that the next move will be a cut. … South Africa CPI …
The dramatic weakening of Ghana’s cedi has been driven by a decline in investor sentiment, and does not reflect a deterioration in underlying macro fundamentals. Given strong growth and supportive commodity prices, we expect that sentiment will turn and …
19th March 2019
Data published this week showed continued weakness in South Africa’s economy at the start of the year which, coming alongside soft inflation, may bring interest rate cuts onto the table sooner than we currently anticipate. Elsewhere, the lack of public …
15th March 2019
Activity data released today showed that South Africa’s economy faltered in January, but we think that conditions will improve later this year. Weak growth and low inflation will add to pressure for a rate cut. … South Africa: Economy has weak start to …
14th March 2019
The first figures from Q1 support our view that economic growth in Nigeria will be slower than most expect this year. Rather than accelerating, weakness in the oil sector, tight fiscal policy, and poor confidence will cause growth to slow over the coming …
12th March 2019
Talk of “nationalising” the South African Reserve Bank (SARB) put pressure on the rand last week. The move – which would bring the Bank in line with global norms – would have no effect on the bank’s independence. But it would still probably lead to a …
11th March 2019
Growth figures out this week showed that South Africa’s economy slowed at the end of last year. But we think that improved confidence will boost investment this year, causing growth to pick up. The country’s energy regulator denied Eskom’s request for a …
8th March 2019
Fears about a sharp rise in yields if South Africa loses its final investment grade rating on local currency debt look overdone. Most of the bad news already appears to be priced in. … South Africa: (another) downgrade already priced …
7th March 2019
South Africa’s current account deficit narrowed to 2.2% of GDP in Q4, but this was more due to weak demand than stronger exports. We expect that the shortfall will widen out again this year. … South Africa Current Account …
Growth in South Africa’s economy slowed to 1.4% q/q (saar) in Q4 of last year, but looser financial conditions and a likely fall in inflation mean the economy should strengthen over the course of this year. … South Africa GDP …
5th March 2019
South Africa’s manufacturing PMI fell to 46.2 in February after rolling power cuts hit sentiment in the sector. But we doubt that the actual fall in activity will be as severe as the survey suggest. … South Africa Manufacturing PMI …
1st March 2019
Markets surged when Muhammadu Buhari was elected president of Nigeria in 2015, but they slumped following his re-election this week. This is just another sign that investors have soured on the president and his interventionist economic policies. We think …
Nigeria’s President Muhammadu Buhari’s clear win in last weekend’s election will almost certainly result in the continuation of his interventionist economic policies, which are widely seen to have slowed growth and depressed foreign investment. President …
28th February 2019
Results released so far suggest that Nigerian President Muhammadu Buhari probably won Saturday’s election. Another term for Mr. Buhari would mean the continuation of his growth-sapping policies. … Nigeria: Early results point to narrow win for …
26th February 2019
History suggests that, if Nigeria’s delayed election on Saturday passes peacefully, the stock market is likely to see a temporary bounce. But over a longer time horizon, global factors are likely to be the bigger driver of local asset prices. Meanwhile, …
22nd February 2019
The wider-than-expected South African fiscal deficit projections announced in today’s budget are a result of measures to deal with the financial troubles of Eskom and other struggling state-owned companies. It looks like the underlying fiscal stance will …
20th February 2019
South African inflation dropped by more than expected in January and is likely to fall further in the middle of the year, increasing the chances that the rate cuts that we expected in 2020 will be brought forward. … South Africa CPI …
We wouldn’t read too much into the recent decline in South African unemployment; the measure tells us little about the country’s economic cycle. While many factors contribute to high levels of structural unemployment, the most important is the failing …
19th February 2019
Nigeria’s presidential election on Saturday offers a choice between two clearly distinct policy options. The result will be close, with the winner probably announced on Monday. Elsewhere, South Africa’s finance minister will use his budget speech on …
15th February 2019
December’s activity data supported our view that growth probably stabilised at about 1% q/q saar in Q4. Despite growing worries about power cuts, we expect that growth will pick up in 2019. … South Africa: Activity data suggest soft end to …
14th February 2019
South Africa’s rolling blackouts anger many, but seem to cause little economic damage. The big risk is that the government will prolong the crisis by propping up Eskom, rather than seriously reforming it. … South Africa: The economic costs of load …
13th February 2019
Nigeria’s economy accelerated to 2.4% y/y in Q4, but momentum in the non-oil sector remained very weak. Low oil prices will weigh on growth in 2019, but the longer-term outlook depends heavily on the result of Saturday’s presidential election. … Nigeria …
12th February 2019
On Saturday, Nigerian voters will face a choice between two radically different policy options. A win for opposition leader Atiku Abubakar would boost local markets, but he would probably struggle to enact his investor-friendly plans. Another term for …
11th February 2019
President Cyril Ramaphosa used a key speech yesterday to promise to reform South Africa’s state-owned utility and to pitch himself as a gradual reformer in the lead-up to a national election now set for 8th May. … South Africa: Ramaphosa focuses on Eskom …
8th February 2019
South African President Cyril Ramaphosa’s plan to split Eskom into three is a welcome sign that Pretoria is willing to consider serious, structural reforms to the troubled electricity utility. Fiscal figures released this week highlight the budget …
