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SARB’s lower inflation target proposal looks close A backdrop of subdued price pressures and declining inflation expectations strengthen the argument that a lower inflation target could bring even deeper interest cuts onto the table. Reserve Bank Governor …
4th July 2025
Protests have erupted again in Kenya recently, bringing violence and instability, and highlighting that the government lacks the political capital to repair the fragile fiscal position. With international borrowing costs prohibitively high, financing …
3rd July 2025
GNU’s first birthday: fights holding back reform Next week marks a year in office for South Africa’s Government of National Unity (GNU). Both investor sentiment and supply conditions have improved under their watch, but persistent intra-party disputes …
27th June 2025
Africa Chart Pack (Jun. 2025) …
25th June 2025
Overview – The threat posed by US trade protectionism to the region, for now, appears muted. An improvement in the terms of trade for most countries should mean less downward pressure on currencies and, alongside low inflation, set the stage for more …
23rd June 2025
Israel-Iran and what it means for Africa The Israel-Iran conflict has caused a jump in oil prices over the past week and there’s a clear risk of further escalation that pushes prices up even higher. That would spell bad news for most African economies, …
20th June 2025
April’s activity data suggest that the weakness of South Africa’s economy in the first quarter of the year – in which GDP expanded by a measly 0.1% q/q – carried over into the start of Q2. Industry continued to struggle and the retail sector lost some …
18th June 2025
Low inflation suggests SARB’s easing cycle has more room to run The fact that South Africa’s headline inflation was unchanged at 2.8% y/y in May, lends more evidence that the SARB should be unworried about underlying price pressures in the economy. Coming …
China senses an opportunity as the US disengages China’s pledge to provide tariff-free access to imports from Africa is a clear effort to strengthen ties as the US disengages from the region, and also appears to be a concessions to African leaders …
13th June 2025
The overnight strikes by Israel on Iran mark a major escalation in the conflict in the region and, with the oil market tighter than it was a few months ago, the risks to oil prices look more balanced than we’d previously thought (rather than skewed to the …
Nigeria floods: worse to come? The flooding Nigeria has faced in recent weeks has claimed scores of lives and, while the economic hit should be limited, the country’s vulnerability to further climate challenges is worryingly high. We should first note the …
6th June 2025
Growth slowdown strengthens case for more rate cuts South Africa’s muted 0.1% q/q growth in the first quarter of the year on the back of a downwardly revised 0.4% expansion in Q4 of last year suggests the recovery is losing momentum. That will only …
3rd June 2025
Tinubu’s two-year anniversary in power It’s two years since Bola Tinubu became president of Nigeria and with support waning, he’s announced ambitious spending plans funded by foreign loans. But with borrowing costs high, we suspect these plans won’t …
30th May 2025
This report is part of our Future of Europe series. Read more analysis, explore the supporting data, and learn about our broader European coverage on the dedicated Future of Europe page. Europe is being buffeted by geopolitical and geoeconomic shifts but, …
The South African Reserve bank resumed its interest rate easing cycle today, with a 25bp cut to 7.25%, and there was a marked dovish shift among the MPC, suggesting – as we have long thought – that the repo rate will decline further over this year. The …
29th May 2025
In this Update, we answer several key questions about how the US Court of International Trade (CIT) tariff ruling might affect the US and other economies. The outlook may now rest on the decision of the Republican-stacked Supreme Court. The upside risks …
Africa Chart Pack (May. 2025) …
28th May 2025
SA budget merely presses pause on fiscal debate South Africa’s finance minister appears to have succeeded – at the third time of asking – at delivering a 2025 Budget that will make it through parliament. But it seems almost certain that tensions within …
23rd May 2025
We will be hosting a Drop-In at 3pm BST to discuss the key takeaways from the Budget and to answer your questions. Register here . South Africa’s Finance Minister Enoch Godongwana’s third attempt at delivering the 2025 Budget should have enough support …
21st May 2025
Inflation stays low, but inflation target change may keep SARB on hold The rise in South Africa’s headline inflation to 2.8% y/y still left it below the lower bound of the Reserve Bank’s 3-6% target range and, ordinarily, would make us more confident that …
Rates on hold with CBN in wait-and-see mode The Central Bank of Nigeria left its policy rate on hold at 27.50% today and, with the disinflation progressing slowly and concerns that low oil prices will put downward pressure on the naira, it looks like it …
20th May 2025
GNU will struggle to fill VAT hike-related hole South Africa’s finance minister takes his third stab at delivering the 2025 Budget on Wednesday. Disputes within the ruling GNU seem to have been resolved but this may come at the cost of slippage on …
16th May 2025
Nigeria’s long-running security challenges have brought obvious human costs, and they have also contributed to the economy’s woes by hurting output in the agriculture and oil sectors, weakening demand, and putting off investment. President Tinubu’s …
15th May 2025
The recent climbdown has left the effective US tariff rate on the rest of the world at around 15% as opposed to the 27% which was threatened at the height of this year’s trade war. While this is still the highest since the 1930s, it is unlikely to cause a …
13th May 2025
Global Trade Stress Monitor …
The US and China have each suspended for 90 days all but 10% of their Liberation Day tariffs and cancelled other retaliatory tariffs. This is a substantial de-escalation. However, the US still has much higher tariffs on China than on other countries and …
12th May 2025
Fiscal slippage appears more likely across SSA Leaders across Sub-Saharan Africa faced with fiscal strains are increasingly embracing tax reform rather than rises. Banking on the former to quickly raise revenue is ambitious and we think this risks further …
9th May 2025
SA 2025 Budget: fiscal slippage is coming South Africa’s 2025 Budget will be tabled for a third time later this month and, to be approved, we think the ANC and DA will need to agree on some spending cuts, although it probably won’t be enough to avoid some …
2nd May 2025
The prospect of a flood of low-cost Chinese exports to African shores may help those economies suffering from high inflation but it risks undermining the growth of domestic industry. Governments in the likes of Nigeria, with a history of employing …
1st May 2025
SA 2025 budget closer, but fiscal slippage coming South Africa’s 2025 budget took a vital step forward after the Treasury scrapped its proposed VAT hike this week. With the DA also recommitting to the GNU, this will provide some of the certainty that the …
25th April 2025
The larger-than-expected fall in South Africa’s headline inflation rate to 2.7% y/y in March will give the Reserve Bank more confidence that its easing cycle can resume. We expect a 25bp reduction to 7.25% at the next MPC meeting in May followed by a …
23rd April 2025
SARB’s inflation uncertainty may be falling The SARB’s Monetary Policy Review (MPR) published this week set out plenty of upside risks to inflation. But it looks like some of the risks from VAT hikes and tariffs have diminished, which could give the SARB …
17th April 2025
The February activity figures out of South Africa showed that the economy was struggling even before the added headwind from US import tariffs. But while there are downside risks to growth, we still believe a combination of easing loadshedding and …
16th April 2025
Africa Chart Pack (Apr. 2025) …
China rather than US trade big concern for Africa Africa’s direct damage from tariffs imposed by the US should be limited, but the indirect hit will be larger if global growth weakens, and financial spillovers materialise. After US President Trump dialed …
11th April 2025
President Trump’s trade war has created material downside risks for the global economy. Our forecasts assume that tariffs on most countries outside China will stay at 10% and retaliation by other governments will be moderate. In this scenario, global GDP …
10th April 2025
The direct trade impact of US import tariffs on Africa is likely to be limited, but there could be more harmful indirect effects via weaker growth in other key trading partners, lower commodity prices and/or a more challenging external financing …
Some oil producers, such as the UAE and Kuwait, should be able to easily weather a period of low oil prices. But a sustained decline in prices would be a bigger challenge for Saudi Arabia, which would need to tighten fiscal policy, and producers with weak …
9th April 2025
President Trump’s reciprocal tariffs are particularly high on some of the lowest-income EMs, which are also among the most vulnerable to the suspension of US aid flows. That raises the risk of balance of payments strains, and also provides an opening for …
8th April 2025
Direct hit from Trump tariffs to be limited African economies will, for the most part, be relatively unaffected by US President Trump’s tariff announcement this week, at least directly. But it may cause indirect harm through lower commodity prices. And …
4th April 2025
We hosted two online Drop-In sessions on 3 rd April to discuss the fallout from President Trump’s Liberation Day tariff announcement. (See a recording here .) This Update contains answers to some of the questions that we received and links to several more …
3rd April 2025
Africa Chart Pack (Mar. 2025) …
31st March 2025
Trump’s auto tariffs to deal limited blow to SA South Africa finds itself in the firing line from US President Trump’s auto tariffs, but the macro impact will be limited and other developments over the past week have been more positive for the country’s …
28th March 2025
Overview – Economies across Sub-Saharan Africa are amongst the least affected EMs by the protectionist shift that the US is embracing. And growth in the region is set for a modest pick-up on the back of lower inflation and easing monetary policy. But …
In this Update, we answer several key questions about how the announced 25% tariffs on US imports of autos and parts might affect the global economy and the US itself. Mexico, Slovakia and Korea are most exposed with up to 1.6% of GDP at risk. But the …
27th March 2025
It is becoming clear that President Trump’s actions are driven by both his fixation on reducing the US trade deficit and his transactional approach to dealing with other countries. So, even though the Trump administration’s ideas to transform the entire …
25th March 2025
Kenya and the IMF agree to disagree Kenya and the IMF abandoned talks over the ninth review of the country’s existing financing programs this week and, while a new deal is in the offing, public debt concerns are likely to build. It’s been clear for some …
21st March 2025
The South African Reserve Bank left its repo rate on hold at 7.50% today, but a minority of MPC members voted for a cut and we do not think the easing cycle is over. If inflation continues to surprise on the downside as we expect and there is clarity on …
20th March 2025
South Africa’s hard activity data for January show that the retail sector is steaming ahead and driving the recovery. We think the lagging industrial sector will start to catch up on the back of monetary easing and improved electricity and logistical …
19th March 2025
Soft inflation keeps rate cut in play The weaker-than-expected South African inflation figure for February, of 3.2% y/y, keeps the door open for the Reserve Bank to lower the repo rate by 25bp (to 7.25%) at its meeting tomorrow. The outturn was unchanged …
