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SA lockdown level up, recovery outlook (still) down The recent tightening of containment measures to curb South Africa’s third virus wave is unlikely to be as damaging for the economy as earlier rounds of restrictions. Even so, the prospect of further …
4th June 2021
Making it official: Nigeria’s devaluation Policymakers at the Central Bank of Nigeria (CBN) appear to have bowed to pressure to devalue the official exchange rate, and finally acknowledged the move. But a unified and fairly valued naira that many are …
28th May 2021
Nigeria’s plans external borrowing as naira falls(?) External borrowing plans put forward by Nigeria’s president this week would leave the debt position even more vulnerable to falls in the naira. This week, President Buhari submitted a request to the …
21st May 2021
South Africa: rand fortunes to reverse The South African rand has been a star performer amongst major EM currencies so far this year, but we think that it will suffer one of the biggest losses against the US dollar by year-end. So far this year, the rand …
14th May 2021
South African politics: intra-ANC balance tilting The suspension of Ace Magashule, the Secretary General of South Africa’s ruling ANC party is likely to go some way in strengthening the hand of President Cyril Ramaphosa in an intra-party fight. But the …
7th May 2021
Ripple effects from India’s virus wave India’s unabating second virus wave risks further delays to vaccine exports through the Covax initiative to much of Sub-Saharan Africa, which would set back economic recoveries further. South Africa seems somewhat …
30th April 2021
Tussle over wages in South Africa Trade unions are ramping up the pressure on South Africa’s government and state-owned enterprises to increase salaries yet austerity plans hinge on a public sector wage freeze. The credibility of the government’s …
23rd April 2021
South Africa: A series of unfortunate vaccine events The announcement this week that South Africa is suspending the roll-out of Johnson&Johnson vaccines, on which it heavily relies, risks further delaying an already slow vaccine campaign. The news follows …
16th April 2021
SDRs & DSSI: a bit more breathing space A flurry of global action this week to help improve low-income countries’ balance sheets is likely to provide only short-term relief and, in the meantime, efforts to provide longer-lasting help to debt distressed …
9th April 2021
Pulling back the curtain on debt risks in Africa Leaders of several multilateral organizations have warned about debt risks in developing countries. Such vulnerabilities are high in much of Sub-Saharan Africa, but immediate debt risks are probably …
1st April 2021
SA Reserve Bank nowhere near a hawkish pivot South Africa’s monetary policy stance is likely to remain accommodative for some time, going against market expectations and the projection model of the Reserve Bank (SARB). This week’s decision to keep the …
26th March 2021
Nigeria lying in economic bed policymakers made The past week has brought further evidence that Nigeria is suffering from stagflation and we suspect it’s a ‘chronic condition’ arising from poor policy choices rather than an ‘acute disease’. Price …
19th March 2021
Sub-Saharan Africa back to bond markets African policymakers seem to be turning increasingly to international bond markets to finance budget deficits this year. Last November, Côte d’Ivoire became the first country in Sub-Saharan Africa to issue sovereign …
12th March 2021
SA: Easing lockdown to lift stranded economic boat Improving virus numbers allowed South Africa to ease containment measures this week, which is likely to inject much-needed momentum into the recovery. As of 1 st March, South Africa moved from lockdown …
5th March 2021
South Africa: reading behind budget lines Finance Minister Tito Mboweni appears to have put rose-tinted glasses on when he delivered South Africa’s budget this week. We noted that, despite repeatedly claiming that the 2021 blueprint was not an austerity …
26th February 2021
SA budget the first test of austerity commitment All eyes will be on Finance Minister Tito Mboweni when he delivers South Africa’s budget speech next Wednesday for any changes in the government’s fiscal consolidation plans. The poor public finances leave …
19th February 2021
AstraZeneca vaccines in Africa: to jab or not to jab? Disappointing news from an AstraZeneca trial will further complicate vaccination campaigns across Sub-Saharan Africa. But heavy reliance on this jab is limiting policymakers’ alternative options. The …
12th February 2021
Debt restructuring “wave” more of a ripple Zambia has become the latest country – after Chad and Ethiopia – to seek debt restructuring under the G20’s Common Framework, but tough negotiations lie ahead and few other countries are likely to go down a …
5th February 2021
Kenya: more room for fiscal manoeuvre? Policymakers in Kenya appear to be exploring options to open up fiscal space to boost the recovery, seemingly with the IMF’s blessing. It is not entirely clear what central bank governor Patrick Njoroge was referring …
29th January 2021
South Africa pulling the plug from SOEs? The South African government’s decision this week to provide no further debt guarantees to state-owned lender Land Bank underscores the mounting pressure on the public purse. Since defaulting on some of its debt …
22nd January 2021
Propping up Africa’s vaccine supply The announcement that the African Union (AU) has secured a large COVID-19 vaccine order is a positive step towards Africa’s recovery from the coronavirus crisis, but the road remains long and bumpy. Reports suggest that …
15th January 2021
Unhappy new year in South Africa There are no signs of South Africa’s COVID-19 outbreak abating – even though tougher restrictions were imposed last month – which will keep the costs of the pandemic high in the coming months. A second wave, officially …
8th January 2021
Trials and tribulations of COVAX Reports this week pointed to the multilateral COVAX facility’s high risk of failure, which would delay many African countries’ access to vaccines and the ensuing economic benefits. South Africa, for its part, missed a …
18th December 2020
Zambia and the IMF: high hopes The confirmation this week that Zambia is seeking an IMF funding program is a positive step, which is likely to improve the chances of a wider debt restructuring deal with external creditors. An IMF deal would lend more …
11th December 2020
SA: tighter restrictions but one eye on the economy South African President Cyril Ramaphosa’s speech to the nation last night suggests that, for now at least, the government is continuing to prioritise the economy over battling a second wave of COVID-19. …
4th December 2020
Nigerian reforms: blowing hot and cold Mixed signals from recent policy announcements in Nigeria raise doubts about the administration’s commitment to pro-business reforms, most notably in relation to the currency. The announcement by the Central Bank of …
27th November 2020
Crawling out of the pandemic era A string of good news from COVID-19 vaccine producers may be followed by further positive updates in the coming weeks, but it is likely to take longer for the “vaccine boost” to reach much of Sub-Saharan Africa compared to …
20th November 2020
Warnings against vaccine euphoria The announcement this week of a successful trial of a COVID-19 vaccine is without doubt good news, even as potential access and distribution issues could test policymakers in the region. But the economic gains may not be …
13th November 2020
Political tensions raise economic stakes Frictions between Ethiopia’s federal government and the Tigray region turned into military confrontation this week, which will inflict damage not only on the population but also on the economy. The relationship …
6th November 2020
South Africa: debt hopes hang by a thread South Africa’s Medium Term Budget Statement this week outlined harsh austerity measures, but it wouldn’t take much to knock the plans off course and leave debt on an unsustainable trajectory. We looked in detail …
30th October 2020
South Africa: fears rise of second COVID wave The recent rise in newly recorded COVID-19 cases in South Africa appears to reflect higher testing more than anything else. But it’s a reminder that a renewed outbreak of the virus poses a major downside risk …
23rd October 2020
Zambia stares into the default abyss A stand-off between Zambia’s government, China and private creditors is pushing the continent’s second-largest copper producer towards default. Last month, the Zambian government requested a deferral of interest …
16th October 2020
This week’s 2021 budget presentation by Nigeria’s President Buhari points to challenges in financing the government’s ambitious spending plans, raising the risk that the authorities turn to financial repression policies, including outright deficit …
9th October 2020
Debt stand-off in Zambia Zambia’s first steps towards debt restructuring have not got off to a good start, reinforcing our fears that the process will be long and arduous. Last week, the Zambian government announced that it had requested a deferral of …
2nd October 2020
Private creditor debt relief: going separate ways This week’s moves to put very large debt burdens in Angola and Zambia on a sustainable path offer some lessons for the rest of the region, and private bondholders. In short, there are many roads to debt …
25th September 2020
IMF increases lending to Angola The approval of Angola’s IMF programme expansion by $765mn this week will go some way towards easing balance of payments pressures, but further debt restructuring is still not out of the question. In addition to disbursing …
18th September 2020
Seeing the good, the bad and the ugly in SA data Figures released this week provided little cause for optimism about South Africa’s prospects for a strong rebound in activity. The slew of terrible data might, at least, prompt policymakers to lend more …
11th September 2020
Ethiopia nudged to progress on Nile dam talks The United States move to partially suspend financial aid to Ethiopia due to the country’s dispute with Sudan and Egypt over the Grand Ethiopian Renaissance Dam (GERD) this week adds to uncertainty surrounding …
4th September 2020
Nigeria’s foreign currency woes Fresh measures by Nigeria’s central bank to clamp down on foreign currency transactions underline the severe pressure on the naira. While the currency will probably be allowed to weaken, further restrictions are likely to …
28th August 2020
Nigeria’s public finances: walking a tightrope Nigerian government spending proposals for 2021, floated this week, shine a light on the bind the authorities are in. In preparation for next year’s budget, officials circulated a plan that would increase …
21st August 2020
SA: drop in virus cases no silver bullet for economy New coronavirus cases in South Africa appear to be dropping off in a sign that the authorities are managing to curb the outbreak but, even if this leads to a further easing of containment measures, the …
14th August 2020
Nigeria: ShopRite takes stage right The announcement this week by South Africa-based food retailer ShopRite that it will exit the Nigerian market reinforces concerns about the country’s increasingly inhospitable business environment. While the coronavirus …
7th August 2020
Angola’s debt sustainability in the spotlight Angolan authorities are reportedly seeking to expand the country’s $3.7bn IMF Extended Fund Facility (first approved in 2018) which, if granted, would ease balance of payments strains. But that’s a big if …
31st July 2020
More funding on the way? News that the IMF Executive Board has approved plans to increase its annual access limits for funding suggests that much of Africa could receive more multilateral support. We won’t go into the full details of the changes (the IMF …
24th July 2020
Ethiopia’s dam dispute raises spectre of conflict Tensions over the Grand Ethiopian Renaissance Dam have ratcheted up over the past week, raising the risk of conflict with Egypt, which would do severe damage to both the country’s near- and long-term …
17th July 2020
Nigerian naira: devaluation but no unified rate Nigeria appears to have devalued the official naira exchange rate this week but the move has, if anything, further dented hopes for a shift towards a market-driven and unified exchange rate regime. We say …
10th July 2020
South Africa’s net exports: changing of the winds Balance of payments figures released this week from South Africa may paint a misleadingly positive economic picture, but – as is often the case – the devil is in the details. In Q1, South Africa’s current …
3rd July 2020
SA budget woes to become a permanent fixture The weak state of South Africa’s public finances was underscored by this week’s emergency budget . Finance Minister Tito Mboweni painted a grim picture, revising the 2020/21 budget deficit to 14.6% of GDP (from …
26th June 2020
Nigeria’s exchange rate: changing tack? Rumours are growing that Nigeria’s government is mulling a proposal to unify the country’s exchange rates, which essentially appears to entail allowing the official exchange rate (at around 360/$, which is used to …
19th June 2020
Fiscal (un)realities in Nigeria Nigeria’s revised budget for 2020 is one step closer to approval, but we suspect that the deficit will be higher than the government estimates. Both chambers of the parliament passed the revised budget blueprint this week, …
12th June 2020
