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South Africa’s economy has one of the weakest growth records of any EM over the past decade and its post-pandemic recovery has been particularly disappointing. At the heart of the problem are major structural impediments to growth that stretch far beyond …
6th September 2023
Better-than-expected Q2, but outlook remains tough The 0.6% q/q rise in South Africa’s GDP in Q2 was stronger than expected but more timely indicators point to a weak start to Q3. And the backdrop of severe power cuts, tight policy and worsening terms of …
5th September 2023
Coup contagion? The military coup in Gabon this week, coming so shortly after a coup in Niger, has raised further concerns about political instability and institutional frailty in the region. Soldiers removed Gabon’s president, Ali Bongo, from power on …
1st September 2023
This page has been updated with additional analysis since first publication . PMI overall improves but still points to weak growth South Africa’s manufacturing PMI strengthened in August, reversing the declines seen in recent months as loadshedding became …
Sub-Saharan Africa is set to record its weakest growth (outside the pandemic) since 2016 this year as the drags from domestic headwinds are exacerbated by a less favourable external environment. Our GDP growth forecasts across the region are generally …
31st August 2023
Equities in Europe, the Middle East and Africa (EMEA) have returned little in US$ terms so far this year. While they may fare better next year, we doubt they’ll outperform the wider emerging equity market. Equities in EMEA, although marginally ahead of …
29th August 2023
South Africa fiscal concerns build Growing concerns about the direction of South Africa’s public finances have caused the yield curve to steepen as risk premia have risen, a trend that may continue as next year’s election approaches. Short-dated local …
25th August 2023
This webpage has been updated with additional analysis, as well as a Chart and Table of key data. Growth pick up is likely to be short-lived Nigeria’s economic growth picked up to 2.5% y/y in Q2 as the damaging effects of a botched demonetisation process …
Sub-Saharan Africa’s tourism industry has recovered slowly from the pandemic, albeit with significant variation in performance across the continent. Signs that the tourism outlook is weakening risk exacerbating balance of payments strains in …
24th August 2023
Further fall in inflation takes additional rate hikes off the table The larger-than-expected fall in South Africa’s headline inflation rate to 4.7% y/y in July leaves it within touching distance of the mid-point of the Reserve Bank’s 3-6% target range and …
23rd August 2023
Nigeria resorts to sticking plasters Continued naira weakness and fuel price concerns have prompted Nigeria’s government to undertake some short-term fixes that threaten to result in renewed vulnerabilities further down the line. This week, Nigeria’s …
18th August 2023
China’s prominence as a creditor to African economies goes a long way to explaining the slower speed of debt restructuring negotiations in Zambia, in contrast to Ghana, following their respective defaults. Mozambique and Kenya are two other countries …
17th August 2023
Q2 expansion, retail a weak spot South Africa’s activity data for June suggest that the economy managed to eke out positive growth in Q2, but more timely indicators suggest that activity struggled to sustain this momentum at the start of Q3. We expect …
16th August 2023
Inflation rises again, CBN has more work to do Nigeria’s headline inflation rate rose again to an almost-18 year high of 24.1% y/y, as the removal of fuel subsidies and the devaluation of the naira continue to push up prices. This fresh increase in …
15th August 2023
Nigeria’s naira gap evidence of Buharinomics Two months on from the naira’s devaluation, the gap between Nigeria’s official and black market exchange rates is widening again. This suggests that the CBN is, once again, propping up the naira and adds to the …
11th August 2023
Angola’s recent 40% devaluation of the kwanza will add to inflation pressures and prompt the central bank to tighten monetary policy aggressively, all of which will weigh on near-term growth. The large share of public debt in foreign currency, means that …
10th August 2023
Nigeria flirting again with unorthodox economics Comments from Nigeria’s president and potential cabinet members this week reinforced our fears that there has not been a clean break from Buharinomics. Justifying the removal of fuel subsidies, President …
4th August 2023
PMI makes for grim reading South Africa’s manufacturing PMI fell even further in July as power cuts intensified again and the outlook remains bleak – we remain comfortable with our forecast for the economy as a whole to stagnate this year. Price pressures …
1st August 2023
Central Bank of Nigeria’s reluctance to hike This week, the CBN’s policy rate hike of 25bp underwhelmed markets, presenting further evidence that Nigerian policymakers are trading off growth concerns with their inflation mandate. The MPC chose to hike …
28th July 2023
Policymakers at the South African Reserve Bank are keen to emphasise that their work to tame the “inflation monster” is not over, leaving open the possibility of additional monetary tightening. The two most likely triggers would be, first, if loadshedding …
27th July 2023
Sub-Saharan Africa is set to record its weakest growth this year, outside of the pandemic, since 2016 as the drags from domestic headwinds are exacerbated by a less favourable external environment. Our GDP growth forecasts across the region are generally …
26th July 2023
New CBN governor stumbles at the first hurdle The Central Bank of Nigeria’s decision to raise its policy rate by just 25bp, to 18.75%, was underwhelming and suggests that officials are trying to balance tackling inflation against the president’s wishes …
25th July 2023
Food supply concerns mount The near-term outlook for global food security and prices has continued to worsen. Following the recent news that we are entering El Niño, this week saw the collapse of the Black Sea Grain Deal as well as India ban the export of …
21st July 2023
This webpage has been updated with additional analysis and charts since first publication. The further fall in inflation in June, coupled with signs of economic weakness and a decline in risk premia, prompted the South African Reserve Bank to leave its …
20th July 2023
Weakness in May looks set to continue The worse-than-expected South African retail sales figures for May add to the raft of weak activity data and it looks like things may get even worse over the coming months. Coupled with figures earlier today showing …
19th July 2023
Drop in inflation means SARB to stand pat tomorrow The larger-than-expected fall in South Africa’s headline inflation rate to 5.4% y/y in June brings it back within the Reserve Bank’s 3-6% target range for the first time since April 2022 and means that …
The blow to Nigeria’s economy from a failed demonetisation exercise is fading but there are already signs that the inflationary effects of the devaluation of the naira and removal of fuel subsidies are weighing on activity. We expect near-term GDP growth …
18th July 2023
Stage 6 loadshedding returns with a vengeance Cold weather in South Africa prompted officials to return to Stage 6 loadshedding this week, threatening a fresh hit to the economy. We doubt that concerns about the inflationary impact of power cuts will …
14th July 2023
The sharp improvement in South Africa’s budget in recent years has started to reverse. And this trend is set to continue as austerity is eased ahead of the 2024 election and revenues fall short of expectations. The debt-to-GDP ratio will continue to rise, …
13th July 2023
The El Niño weather pattern is on its way and threatens to hit agricultural production across much of Africa over the coming months, curtailing GDP growth, pushing up inflation and dealing a fresh blow to fragile balance of payments positions. There’s …
7th July 2023
Tanzania’s economic growth will remain sluggish by past standards over the next couple of years due to the effects of persistent drought and tight fiscal policy. But with policymaking shifting in a more business-friendly direction under President Hassan …
6th July 2023
PMI falls further, easing price pressures to stay SARB’s hand South Africa’s manufacturing PMI fell in June to its lowest level since mid-2021 and remains consistent with declines in output in the sector over the coming months. The survey also shows that …
3rd July 2023
Kenya: Thugge makes his mark Kenya’s central bank hiked interest rates by 100bp, to 10.50%, at an unscheduled meeting this week. The move was pinned on an increase in inflation in May, but more than anything it seems to be a strong attempt by new governor …
30th June 2023
Risk premia have fallen across the region over the past month. In the region’s largest economy, Nigeria, that has come on the back of a marked policy shift since President Tinubu took office in late-May. Costly fuel subsidies have been removed and the …
28th June 2023
The removal of fuel subsidies and the devaluation of the naira are likely to push inflation in Nigeria towards 35% y/y, which will prompt further interest rate hikes by the central bank and weigh on GDP growth over the coming quarters. Our growth …
27th June 2023
Zambia secures deal with official creditors This week saw Zambia edge closer to getting a debt restructuring over the line, but an agreement with official creditors suggested that there remain sticking points when it comes to negotiations with China. …
23rd June 2023
Governments in Turkey and Nigeria have started to turn away from unorthodox economic policies in recent weeks, and in both cases currencies have been allowed to move closer to fair value. The key thing to watch next is whether central banks in both …
21st June 2023
This webpage has been updated with a table and chart of key data. Weaker inflation probably means tightening cycle is over The larger-than-expected decline in South Africa’s headline inflation rate, to 6.3% y/y, reinforces our view that the tightening …
This week’s plunge in the Nigerian naira marked the latest positive step by President Bola Tinubu as he seeks to overhaul the economy, but there are still plenty of reasons to be cautious that this policy shift marks a clean break from the Buhari-era. A …
16th June 2023
Inflation edges up and set to soar in June Nigeria’s headline inflation rate rose to a fresh 17-year high of 22.4% y/y and the recent removal of fuel subsidies alongside yesterday’s devaluation of the naira mean that it is likely to surge to more than 30% …
15th June 2023
Policy shift continues, but reasons to remain cautious Reports that the Central Bank of Nigeria has devalued the naira would, if confirmed, represent another positive policy step by the new Tinubu administration. But we retain our reservations this is a …
14th June 2023
After dodging recession, economy made decent start to Q2 April’s activity data out of South Africa suggest that, after dodging a technical recession in Q1, the economy made a bright start to the second quarter. But external and domestic headwinds, …
Click here to read full text. Overview – Sub-Saharan Africa is set to record its weakest growth this year, outside of the pandemic, since 2016 as the drags from domestic headwinds are exacerbated by a less favourable external environment. Our GDP growth …
13th June 2023
The suspension and potential removal of Godwin Emefiele as Nigeria’s central bank governor raises hopes that there will be a shift away from the current unorthodox and interventionist monetary and exchange rate policies. A large devaluation of the naira …
12th June 2023
Agriculture dampened SA growth in Q1 South Africa’s Q1 GDP figures released this week revealed a big drag from the agricultural sector. Some of the factors that weighed on output (namely the weather) are likely to prove temporary but, even so, confidence …
9th June 2023
This webpage has been updated with a table and chart of key data Technical recession dodged, but outlook bleak The 0.4% q/q rise in South Africa’s GDP in Q1 means that the economy once again skirted a technical recession, but the outlook remains bleak. …
6th June 2023
Nigeria: subsidies slashed, naira nerves? In a positive early move, Nigeria’s President Bola Tinubu removed fuel subsidies in his first week in power. But it looks like the fiscal savings will be spent, leaving public debt on an upwards trajectory. And …
2nd June 2023
PMIs point to further falls in manufacturing ahead The fall in the South African manufacturing PMI in May leaves it at a level consistent with modest falls in output in the sector. And the collapse in the future conditions component suggests that things …
1st June 2023
SA: rising risk premia threaten high for longer rates One new threat to the inflation outlook that the South African Reserve Bank highlighted at its policy meeting on Thursday was a higher country risk premium which is fuelling downward pressure on the …
26th May 2023
Central banks in the region’s two largest economies, Nigeria and South Africa, both hiked interest rates this month and, whereas attention elsewhere is turning to rate cuts, the risks seem to be tilted towards further increases in both countries. …
25th May 2023
