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Zambia and Angola hikes, Nigeria resists High inflation is pushing some African economies to return to monetary tightening but Nigeria has resisted so far. We doubt this will last. Inflation rose again in Nigeria, Angola and Zambia last month as currency …
24th November 2023
Growth pick up is likely to be short-lived Nigeria’s economic growth was unchanged at 2.5% y/y in Q3 as a smaller drag from the oil sector offset a slowdown in the rest of the economy. Growth is likely to slow over the coming quarters, as the naira’s …
The South African Reserve Bank opted against responding to last month’s larger-than-expected rise in inflation with an interest rate hike, leaving the repo rate unchanged at 8.25% today. But officials continued to strike a hawkish tone and it looks like …
23rd November 2023
Inflation rises, but SARB will take comfort from weaker core pressures The larger-than-expected rise in South Africa’s headline inflation rate, to 5.9% y/y in October, is likely to reinforce central bank policymakers’ hawkish rhetoric when they meet …
22nd November 2023
The intensification of loadshedding has brought growth in South Africa’s economy to a halt this year, but there appears (finally) to be some light at the end of the tunnel. Repairs to existing power plants, independent power projects, and the …
20th November 2023
CBN poor communication harming credibility CBN Governor Cardoso’s press remarks this week highlighted his continued ambition to restore confidence in and the credibility of the Bank. But so far an action that would help – a clear strategy to stabilise the …
17th November 2023
During the past decade, the global economy has transitioned out of an era in which globalisation was the key driver of economic and financial relationships into one shaped by geopolitics. Previously, most governments had believed that closer economic …
16th November 2023
Inflation quickens again, putting more pressure on the CBN to act Nigeria’s headline inflation accelerated again to 27.3% y/y in September, as the removal of fuel subsidies and the naira’s struggles continued to feed through. The central bank will need to …
15th November 2023
Retail recovery helping to offset industrial weakness September’s activity data for South Africa suggest that the economy probably stagnated over Q3 as a whole. Some of the recent drags on the economy, such as loadshedding, are likely to ease in 2024 but …
Kenya 2024 Eurobond risks fall back Kenya’s partial payment of its $2bn Eurobond will improve its chances of avoiding a sovereign default next year. Extra IMF funds and an improved balance of payment position will also help, but sticking with austerity …
10th November 2023
This page has been updated with additional analysis since first publication . In this Update , we present our sovereign debt heat map that provides a snapshot of debt risks across Sub-Saharan Africa. Government debt is still above pre-pandemic levels and …
AGOA conference begins as Uganda kicked out Officials are discussing the future of a key US-Africa trade act at a conference in Johannesburg that started today. Uganda is already set to lose duty-free access to the US which, although not a major blow, is …
3rd November 2023
South Africa’s finance minister reaffirmed his commitment to fiscal consolidation in today’s Medium Term Budget Policy Statement (MTBPS) but, even so, debt is now projected to peak at a much higher level than previously envisaged. A potential new fiscal …
1st November 2023
PMI signals weak start to Q4 South Africa’s manufacturing PMI recorded a fresh fall again in October, signalling that the economy made a poor start to Q4. We expect growth to remain sluggish over the coming quarters as weak demand conditions outweigh any …
Economic growth across Sub-Saharan Africa is likely to pick up over the coming quarters, but a challenging external environment means that balance of payments positions will remain under strain and fiscal and monetary policy will need to stay tight. Our …
31st October 2023
Food prices risk delaying Africa interest rate cuts Inflation across Africa has been falling back recently, but persistent food price pressures pose a threat to policymaker’s ambitions to start cutting interest rates. The SARB’s Deputy Governor Fundi …
27th October 2023
The large falls in Nigeria’s currency will push inflation up even further and is one reason behind our below consensus near-term GDP growth forecasts. But the good news is that the banking sector looks relatively well placed to weather this devaluation …
25th October 2023
Africa’s debt challenges look set to continue Sovereign debt restructuring discussions between Zambia and Ghana and their bilateral creditors have been encouraging. But the next challenge is talks with private lender, which may prove lengthy. Zambia …
20th October 2023
Activity improves, but slow growth set to continue The batch of South African activity data for August was a mixed bag, but the overall picture is that the economy struggled for growth in Q3. And tight policy means that growth in 2024 will be modest too. …
18th October 2023
Inflation rise means SARB won’t cut rates until 2024 The larger-than-expected rise in South Africa’s headline inflation rate, to 5.4% y/y, in September supports our view that the Reserve Bank will only turn towards interest rate cuts from next year. The …
This page has been updated with additional analysis since first publication . Inflation accelerates once again, setting the stage for Central bank hikes Nigeria’s headline inflation rate rose again to an almost-18 year high of 26.7% y/y in September, …
16th October 2023
Ghana rate cuts more likely as inflation falls Annual inflation in Ghana eased again to 38.1% y/y over September which gives the central bank some leeway to consider cutting rates at its next meeting. The drop in inflation last month was down from 40.1% …
13th October 2023
The continued deterioration in South Africa’s budget position in recent months leaves Finance Minister Enoch Godongwana facing an uphill challenge to reassure investors at November’s Medium Term Budget Policy Statement. The focus seems to be turning to a …
12th October 2023
Nigeria: labour strike averted at a cost Nigeria avoided a potentially disruptive workers’ strike this week after the government made a late offer of short term relief measures, but these risk adding to fiscal and inflationary pressures. Unions had called …
6th October 2023
Sub-Saharan African central banks are unlikely to follow their peers in other EMs in cutting interest rates soon. With inflation falling more slowly, alongside balance of payment and public debt strains, interest rates will stay high for longer. Nigeria …
5th October 2023
The sell-off in bond markets has taken a breather today, helped in part by softer data on the US labour market. However, the scale of the moves over the past week has invoked comparisons to previous financial crises that have been caused by sharp moves in …
4th October 2023
This page has been updated with additional analysis since first publication . PMI continued weakness signals poor growth till year end South Africa’s manufacturing PMI recorded a fresh large fall in September, suggesting that the pick-up in activity in …
2nd October 2023
29th September 2023
SA's avian flu outbreak unlikely to sway the SARB South Africa is in the midst of a severe avian flu outbreak which, coming alongside the effects of loadshedding, has prompted fears of shortages and higher prices for eggs and chicken meat. But this is …
Nigeria’s policy shift has stalled in recent weeks as officials have responded to a growing political backlash by reverting to the interventionist tendencies of the Buhari administration. The result is that the naira has plunged on the parallel market and …
28th September 2023
Overview – Economic growth across Sub-Saharan Africa is likely to pick up over the coming quarters, but a challenging external environment means that balance of payments positions will remain under strain and fiscal and monetary policy will need to stay …
27th September 2023
Nigeria's fuel subsidy unexpectedly returns The recent pick-up in oil prices will provide welcome hard currency income for Nigeria. But high oil prices and a weak naira also signal the return of the fuel subsidy. As a major oil exporter, Nigeria benefits …
22nd September 2023
The South African Reserve Bank left interest rates on hold today at 8.25% and continued to emphasise that inflation risks remain tilted to the upside, suggesting that it is in no rush to begin loosening policy. Indeed, the SARB is likely to be a …
21st September 2023
This page has been updated with additional analysis since first publication. Activity weak even before latest intensification of loadshedding South Africa’s activity data for July was relatively downbeat, and more timely data suggest that the economy is …
20th September 2023
Inflation rises, but SARB to stand pat tomorrow The small rise in South Africa’s headline inflation rate to 4.8% y/y in August partly reflected a fresh pick-up in core price pressures, but we doubt that this will prompt the SARB to restart its tightening …
South Africa’s fiscal rule talk Reports emerged this week that, in a bid to keep investors on side amid a worsening budget position, South Africa’s Treasury is proposing to establish a new “fiscal anchor”. Even so, a looser fiscal stance still seems an …
15th September 2023
This page has been updated with additional analysis since first publication . Inflation accelerates once again, setting the stage for more tightening Nigeria’s headline inflation rate rose again to an almost-18 year high of 25.8% y/y in August, as the …
South Africa’s unemployment rate has dropped back over the past year or so but it remains far above its pre-pandemic level. The rise in long-term unemployment, which has its roots in both cyclical and structural factors, is particularly worrying and could …
14th September 2023
Policy mistakes risk being repeated in Nigeria Recent interventionist actions from Nigeria’s central bank and government have heightened our fears that growing political pressures are undermining policy reforms. This could see Nigeria’s inflation and …
8th September 2023
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
