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South Africa’s new finance minister used this week’s budget statement to signal a shift away from further austerity, suggesting that Pretoria is prioritising support for the weak economy. Nigerian officials, by contrast, promised to tighten policy. Given …
26th October 2018
The government’s decision to accept a wider deficit rather than tighten policy to meet previous targets will push up debt levels. But so long as bond yields don’t rise sharply (which we doubt is likely) this should provide support to the flagging economy. …
24th October 2018
South African inflation stabilised in September remaining unchanged at 4.9% y/y. We think that inflation has peaked and expect that the SARB will keep its key rate on hold at next month’s policy meeting. … South Africa CPI …
South Africa’s new finance minister will probably announce further fiscal tightening in tomorrow’s Medium Term Budget Policy Statement in order to meet existing targets. This will likely placate ratings agencies, but supports our view that economic growth …
23rd October 2018
Worries about Africa’s rising public debt have focused on Mozambique and Zambia, but the situation elsewhere is less stable than it first appears. Nigeria’s debt position, for example, is very fragile. Full-blown crises may not be imminent, but we think …
22nd October 2018
Despite the weakness of the economy, South Africa’s new finance minister will probably use next week’s budget review to tighten fiscal policy, rather than to announce new stimulus measures. On a slightly more positive note, figures out this week did, at …
19th October 2018
August’s headline mining output figures were very poor. But it still looks like the economy as a whole finally escaped recession in Q3 due to recoveries in the retail and manufacturing sectors. … South Africa: Economy finally returning to …
18th October 2018
Economic growth in Sub-Saharan Africa will probably strengthen a touch in 2019, but growth across the region will remain weaker than consensus expectations. We think that growth in Nigeria will slow as oil prices fall and output stabilises. Meanwhile, the …
16th October 2018
Nigerian inflation remained essentially unchanged in September, which supports our view that – despite recent hawkish language – policymakers will leave their key rate on hold over the coming months. … Nigeria Consumer Prices …
The resignation of South Africa’s finance minister boosted the rand this week by demonstrating President Ramaphosa’s firm stance on corruption. Meanwhile, Nigeria’s key opposition party selected its presidential candidate – setting the stage for next …
12th October 2018
The Ghanaian and Ivorian authorities’ failure to agree on a harmonised farm-gate cocoa price dampened hopes of a ‘Choc-OPEC’ that could effectively influence the global market. But collaboration in other areas – like agricultural research – will boost the …
11th October 2018
Manufacturing figures released today supported our view that the economy exited recession in Q3. But growth probably remained weak by historical standards, which we think will forestall rate hikes. … South Africa Manufacturing Production …
Nigeria’s February 2019 election will offer a stark policy choice between stability under President Muhammadu Buhari and liberalising reforms under opposition leader Atiku Abubakar. While the vote will be close, President Buhari is probably the favourite …
10th October 2018
New GDP figures have presented a more flattering picture of Ghana’s economy, though obviously actual output remains unchanged. The Bank of Uganda hiked its key interest rate this week, adding to signs that Africa’s wave of policy loosening is over. …
5th October 2018
Angola will return to growth in 2019, but the recovery will probably be weaker than most expect. And we doubt that the worrying debt position will improve. Whereas the IMF expects that the public debt-to-GDP ratio will peak this year, we think that the …
4th October 2018
The continued fall of South Africa’s manufacturing PMI in September underlines the fact that conditions remained tough in Q3. While we think the economy probably exited recession, growth was very weak. … South Africa Manufacturing PMI …
1st October 2018
Central banks across Africa held their rates unchanged this week, strengthening our view that the region’s long loosening cycle has now come to an end. Nigeria’s election cycle will get into gear next week, as the opposition PDP selects its candidate for …
28th September 2018
Zambia’s debt situation is deteriorating rapidly, and concerns about hidden debts mean that the situation could be much worse than it appears. Given low debt servicing costs, a missed payment is unlikely in the short term. Debt restructuring, if it takes …
27th September 2018
Figures released over the past month showed that the South African and Angolan economies both contracted in the first half of the year, with South Africa entering a technical recession in Q2. Policymakers across the region held rates in September, but …
Nigerian policymakers struck a hawkish tone today, but we doubt that rate hikes are on the cards. Inflationary pressures are probably not as worrying as Governor Emefiele seems to believe. Kenyan policymakers left their key policy rate on hold again, and …
25th September 2018
President Ramaphosa’s US$28bn infrastructure fund is mostly made up of already-committed public spending, and the economic effect will be limited. Lower-profile reforms to visa rules, mining regulation, and utility pricing, however, will all improve the …
21st September 2018
Zambia’s debt worries escalated this week, and it’s increasingly difficult to see how the country can avoid a full-blown crisis. Elsewhere, yesterday’s MPC vote in South Africa was closer than we’d expected, but we still think that the SARB will keep …
Today’s split MPC decision in South Africa shows significant minority support for tighter policy. But if the hawks couldn’t swing today’s vote, it’s unlikely that they will succeed in pushing for a rate hike over the next six months or so – with the rand …
20th September 2018
South African inflation slowed to 4.9% in August, which supports our view that policymakers at the SARB will leave their key rate on hold at 6.50% at their meeting tomorrow. … South Africa CPI …
19th September 2018
Rwanda’s investment-focused and state-managed development model is delivering rapid growth and we expect the country to remain one of Africa’s fastest-growing economies. However, the government is still likely to miss its own ambitious economic targets. … …
18th September 2018
There are growing suggestions that the South African Reserve Bank will raise interest rates at its meeting next week, but the weakness of the latest activity data and of inflation expectations mean we think that it will keep rates on hold. Elsewhere, the …
14th September 2018
The latest retail sales figures add to the evidence that South Africa’s economy made a strong start to Q3 and our Tracker points to growth of 2-2.5% q/q saar. But there is mounting survey evidence that this momentum faded in August. … South Africa: a …
12th September 2018
The stronger-than-expected growth in South African manufacturing recorded in July suggests that the economy made a good start to Q3. But more timely surveys indicate that this momentum hasn’t been maintained over the course of the third quarter. … South …
11th September 2018
Figures released this week showed that South Africa’s economy performed even worse than we’d thought in Q2. Headline growth will probably recover in the second half of the year, but we’ve downgraded our full-year forecast from 1.3% to 0.8%. Elsewhere, …
7th September 2018
Attention focused on China-Africa ties this week as leaders from across the continent met with Chinese President Xi Jinping in Beijing for a major summit. In this Update we attempt to situate the summit in the broader context of China-Africa relations. … …
6th September 2018
The improvement in South Africa’s current account deficit in Q2 should help to ease concerns about the country’s external financing needs and provide some support to the rand. Coming alongside the weakness of the latest GDP data, it reinforces our view …
South Africa’s economy formally entered recession in Q2 driven by another poor performance from the agricultural sector. We expect the economy to embark on a recovery over the rest of this year, but a sharp rebound is unlikely. Today’s data will further …
4th September 2018
The collapse in South Africa’s manufacturing PMI in August may partly reflect a deterioration in sentiment related to the turmoil in EM financial markets last month. Even so, the data provides an early sign that hopes for a sharp rebound in growth in the …
3rd September 2018
Nigeria’s economy slowed in Q2, despite stronger non-oil growth. More recently, an unexpectedly big fine imposed on MTN this week will raise questions about the country’s regulatory environment. The British PM’s visit to Africa didn’t result in many …
31st August 2018
Fears that financial turbulence in Turkey were the first sign of broader problems rumbled markets across the emerging world in August, with South Africa one of the hardest-hit. The country has Africa’s most globally-integrated economy and most …
30th August 2018
UK Prime Minister Theresa May is using a visit to Africa to promote economic ties with the region, but we doubt that trade links between Britain and Sub-Saharan Africa will strengthen over the coming years. … UK-Africa trade ties will remain …
29th August 2018
Few details about Angola’s request for IMF aid have been released, but any deal would boost investor confidence. We revised down our rand/dollar exchange rate forecasts this week. A tweet from President Donald Trump subsequently highlighted the currency’s …
24th August 2018
The rand’s recent falls have prompted us to downgrade our end of year forecasts. We now think that the currency will slip from 14.4/$ to 15/$ by the end of 2018 and to 15.5/$ by the end of 2019. … South Africa: Revising down our rand …
22nd August 2018
July’s stronger-than-expected inflation was almost entirely due to sharp rise in fuel costs. Core inflation remained stable, and we think that the SARB will keep policy on hold this year. … South Africa CPI …
GDP figures due next week will probably show that growth in Nigeria remained weak in Q2. We think that growth was probably about 2% y/y, essentially in line with the previous two quarters. … Nigeria: Activity data suggest weak growth in …
21st August 2018
Attention this week focused on the rand, which fell after the Turkish crisis spooked investors. This distracted attention from activity data suggesting that the country’s economy stagnated in Q2. Elsewhere, confidence in Kenya was hit by a corruption …
17th August 2018
Q2 activity data were an improvement on Q1, when the economy contracted sharply. But a weak performance from key sectors has still dealt a blow to hopes that President Ramaphosa would boost growth. Indeed, it’s possible that South Africa entered a …
15th August 2018
The rand’s status as a liquid, easily traded currency makes it particularly vulnerable to shifts in EM sentiment. But these seldom last, and the SARB will not – as some expect – respond by hiking rates. … South African rand: Why always …
14th August 2018
Policymakers at the Bank of Uganda kept the policy rate unchanged at their meeting this morning and we don’t expect any rate cuts for the remainder of this year. … Uganda Interest …
13th August 2018
The falling rand has, yet again, highlighted the currency’s vulnerability to EM risk sentiment. From an economic perspective, however, the country’s situation is very different from Turkey’s building crisis. … South Africa: Turkey …
The rescue of five small failing banks in Ghana should help to improve the (fragile) health of the sector and, in time, should help to support a recovery in credit growth. Elsewhere, the resumption of debt restructuring talks in Mozambique is likely to …
10th August 2018
Growth in South Africa’s manufacturing sector slipped to 0.7% y/y in June, but today’s figures still suggest that the economy just managed to dodge another quarter of q/q contraction in Q2. … South Africa manufacturing production …
7th August 2018
A new offer to restructure Mozambique’s debt hints at the shape that an eventual deal may take. An agreement would provide a boost to confidence in an economy that is already starting to recover. … Mozambique: Debt offer suggests a deal is …
6th August 2018
While policymakers in other EMs are hiking rates, we think that African central banks will follow Kenya's recent example and continue to ease policy over the next 18 months. Fears surrounding the economic impact of South Africa's land reform process are …
3rd August 2018
President Ramaphosa’s call for constitutional change has stoked investor fears of economically-painful land reform. We think that this is overdone, but a poorly-managed process will boost market volatility. … SA: Land reform: Market moves exceed economic …
1st August 2018
