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Will the naira’s rebound last? The sharp recovery in the naira in recent weeks has been somewhat of a surprise and it has come at the expense of a steep decline in FX reserves. Without substantial improvements in the current account position or capital …
19th April 2024
South Africa’s latest hard activity data provided some encouraging signs that the economy may be turning the corner even if it comes too late to help the ANC’s hopes of keeping its majority in parliament after May’s election. With electricity outages …
17th April 2024
This page has been updated with additional analysis since first publication. Inflation fall will not sway the SARB into interest rate cuts The larger-than-expected fall in South Africa’s headline inflation rate, to 5.3% y/y, in March will not be enough to …
Further jump in inflation means tightening cycle likely to continue Nigeria recorded another acceleration in headline inflation to 33.2% y/y in March as the previous falls in the naira have continued to push up prices. And while the naira has staged a …
15th April 2024
Spectre of former President Zuma worries ANC The big news in South Africa this week was a court decision allowing former president Zuma to stand in the May elections, which has added another level of uncertainty to the vote. Opinion polls suggest that his …
12th April 2024
Nigeria’s authorities have ceased central bank deficit monetisation via the ways and means facility. But the government will struggle to finance its ambitious spending plans – particularly given the challenges of raising revenues. We suspect that the …
11th April 2024
Uganda’s strong recent economic recovery is facing domestic and external headwinds, including international condemnation of the government’s Anti-Homosexuality Bill – and the associated impact on financing and trade – and upcoming EU deforestation …
8th April 2024
SA’s weak demand is holding back its recovery South Africa’s March PMI numbers were disappointing and support our view that, while the drags from loadshedding and austerity are easing, the recovery this year will be subdued. The ABSA/BER manufacturing …
5th April 2024
El Ni ño is causing severe drought across much of southern Africa, which is likely to weigh on GDP, push up inflation and strain balance sheets. South Africa has also suffered water shortages, albeit more as a result of creaking infrastructure than low …
4th April 2024
Zambia moves closer to full debt restructuring deal Zambia secured an debt restructuring deal with private bondholders this week. It looks like it has the seal of approval from official creditors, paving the way for the country to finally exit default. …
28th March 2024
Africa Chart Pack (Mar. 2024) …
Overview – Sub-Saharan Africa will record a pick-up in growth over the coming years, helped by an improving external environment reducing the threat of further large currency falls as well as sovereign defaults. Monetary and fiscal policy will generally …
27th March 2024
The South African Reserve Bank left its repo rate unchanged at 8.25% for a fifth consecutive meeting today and the continued hawkish rhetoric from Governor Kganyago supports our view that rate cuts will only happen after May’s election. Even then, a …
The Central Bank of Nigeria continued its hiking cycle today, raising rates by 200bp to 24.75%, providing further evidence that officials are fighting aggressively to tackle the inflation problem and restore its damaged credibility. We think that the CBN …
26th March 2024
SARB: will rate cuts ever come? The South African Reserve Bank (SARB) looks set to leave interest rates on hold at 8.25% next week and it now seems an easing cycle won’t begin until after May’s election, the outcome of which could even persuade the SARB …
22nd March 2024
Sub-Saharan Africa’s enormous demographic tailwind means the region will see the fastest GDP growth rates (4-5%) of any region between now and 2050. By the middle of the century, the region’s overall GDP will probably be larger than any single economy bar …
21st March 2024
We hosted a 25-minute online briefing on Wednesday 27 th March to discuss EM financial risks in more detail. Watch the recording here . The past few years have sharpened investors’ focus on assessing risks and vulnerabilities across the EM world. We have …
20th March 2024
South Africa’s latest hard activity data show that the economy continued to struggle at the start of 2024, which will hardly help the ANC’s hopes of keeping its majority in parliament after May’s election. That said, we still think that easing electricity …
Jump in inflation to delay start of interest rate cuts The larger-than-expected rise in South Africa’s headline inflation rate, to 5.6% y/y, in February means that the SARB is likely to delay the start of its easing cycle until after May’s election. …
Nigeria eyes up return to Eurobond market The Nigerian naira’s latest devaluation has taken it closer to fair value and, with investor sentiment towards Nigeria improving, the government is lining up a fresh Eurobond sale. That may help to plug the budget …
15th March 2024
Inflation hits 31%, but CBN likely to hold fire on further rate hikes Nigeria’s headline inflation accelerated to a higher-than-expected 31.7% y/y in February and the naira’s latest sharp falls mean it will continue to march towards 35% y/y over the …
The devaluation of the Nigerian naira earlier this year appears to have brought it much closer to fair value, which will help to put the balance of payments on a more stable footing. The key now is for the CBN to allow the naira to move in line with …
13th March 2024
South Africa’s struggling PGM producers Lower global metal prices are pushing South Africa’s major producers to contemplate cost-cutting which could lead to lower output and fewer jobs, adding yet another constraint to the modest pick-up in growth that we …
8th March 2024
Very modest growth in Q4, but 2024 should be better South Africa’s economy posted a measly 0.1% q/q increase in GDP in the final quarter of last year and the latest evidence points to a soft start to 2024 too. But we still think that, with the drags from …
5th March 2024
CBN delivers bold hike but inflation risks remain The Nigerian central bank’s 400bp rate hike and its reaffirmation of its inflation fighting credentials should help provide respite to the naira and inflation. But Nigeria will need to shift away from …
1st March 2024
PMI bounces, but still looks like a soft start to 2024 Although South Africa’s manufacturing PMI jumped in February, the sector appears to have made a soft start to the year. We still expect growth to pick up over the rest of this year as loadshedding …
Africa Chart Pack (Feb. 2024) …
28th February 2024
New MPC delivers large rate hike After a seven-month hiatus, the Central Bank of Nigeria’s (new-look) Monetary Policy Committee stepped up to the plate and hiked interest rates by 400bp, to 22.75%, as it showed greater appetite to tackle the inflation …
27th February 2024
Talk of the South African Reserve Bank’s inflation target being lowered has reared its head again. In this Update , we answer five key questions on what this could mean for the economy. In the near term, the adoption of a lower target would prompt us to …
Key takeaways from South Africa’s Budget South Africa’s finance minister recommitted to fiscal restraint in this week’s Budget, but an inability to resist calls greater spending ahead of and after the election is likely to derail these fiscal ambitions, …
23rd February 2024
Growth pick up is likely to be short-lived Nigeria’s GDP growth rebounded to 3.5% y/y in Q4 but we doubt that this strength will last. Tighter monetary policy, coming alongside the pernicious effects of further weakness in the naira and ongoing struggles …
22nd February 2024
The fiscal restraint shown by South Africa’s finance minister in today’s Budget was received positively in local financial markets, but the reality is that the government will struggle to meet its goals (indeed, it’s already doing so). And pressure on the …
21st February 2024
Rise in core inflation will give cause for concern to the SARB South Africa’s headline inflation rate picked up to 5.3% y/y in January and the rise in core inflation is likely to spook an already-hawkish SARB, possibly pushing the start of an easing cycle …
Nigeria saw sluggish growth over the second half of last year, and the latest falls in the naira mean inflation is set to rise even further over the coming months, which should prompt the central bank to finally spring to action with large interest rate …
20th February 2024
South Africa's Finance Minister Enoch Godongwana faces an uphill task in next week's Budget to convince investors that the government will be able to place the public finances on a sustainable footing. Mr. Godongwana will start his speech in parliament …
16th February 2024
South Africa’s fiscal strains have seen the government explore tapping revaluation gains on the country’s FX reserves held at the SARB. Utilising these funds to pay down the government’s debt would help to improve South Africa’s fiscal health. But there’s …
15th February 2024
Inflation at near-30%, all eyes on CBN Nigeria’s headline inflation rate rose further to 29.9% y/y in January and the latest sharp fall in the naira means that it is likely to reach close to 35% y/y over the coming months. We expect the central bank to …
The effects of El Niño will cause cocoa harvests in Côte d’Ivoire and Ghana, which account for more than half of global output, to fall by around 20% this year. But the related surge in cocoa prices means that, if anything, overall incomes are likely to …
14th February 2024
South Africa’s latest hard activity data show that the economy finished last year with a whimper, but we think that easing electricity outages, weaker inflation pressures and less restrictive fiscal policy will support a modest pick-up in growth this …
SONA: Ramaphosa sets out policy plans South Africa’s President Ramaphosa delivered his State of the Nation (SONA) on Thursday. His speech celebrated the 30 th anniversary of the transition to democracy and laid out the ANC’s policy agenda ahead of the …
9th February 2024
Surprise hike, tightening cycle may not be finished yet The Central Bank of Kenya delivered a surprise 50bp interest rate hike today, to 13.0%, suggesting that the MPC’s inflation fears are outweighing signs that exchange rate pressures are easing. With …
6th February 2024
Naira plunges again, is the policy shift back? This week the naira dropped for a second time in eight months, contradicting months of claims by officials that the currency will witness a revival. The hope is that this new found policy pragmatism extends …
2nd February 2024
South Africa makes a poor start to 2024 South Africa’s manufacturing PMI recorded a sharp drop in January as logistics problems and weak demand weighed on activity. We still expect growth to pick up over the course of this year, but this latest data …
1st February 2024
Africa Chart Pack (Jan. 2024) …
31st January 2024
Bank of Ghana starts its easing cycle The Bank of Ghana kicked off its easing cycle with a 100bp cut, to 29.00%, today and an improving balance of payments position alongside further falls in inflation mean that more cuts are on the cards over the coming …
29th January 2024
Takeaways from the SARB meeting The South African MPC’s fears expressed at this week’s meeting about an inflation resurgence look overdone. Even so, with fiscal risks high ahead of the election, officials will continue to tread cautiously. At the …
26th January 2024
SARB holds again, replaying inflation risk concerns The South African Reserve Bank resisted responding to last month’s fall in inflation with an interest rate cut, leaving the repo rate unchanged at 8.25% today. The MPC’s message was little changed, …
25th January 2024
This is a special Global Economics Chart Pack that provides clients with key analysis to make sense of the macro and market impact of the disruptions to maritime shipping. The charts in this document come from our brand-new shipping dashboard , which …
Ghana’s relatively quick progress in debt restructuring talks with creditors contrasts with the slow experiences of Ethiopia and Zambia. Much of this can be explained by the China’s role in discussions, but private bondholders are also playing hardball. …
24th January 2024
Sharp inflation fall not enough to encourage early rate cuts South Africa’s headline inflation rate fell back further to 5.1% y/y in December but this is unlikely to be enough to convince the Reserve Bank to start an easing cycle tomorrow. November’s …