Africa: Recovery yet to gain traction

While we still expect that most African economies will pick up steam in 2017, the latest figures suggest that the region’s economic downturn has still yet to bottom out. Major economies across Africa either remained weak or deteriorated over the past few months. The situation varies across the continent, but even Kenya – one of the economies that has generally performed well – has hit a rough patch. In economies that were already struggling, things mostly got worse. Q3 data showed that Nigeria’s economy contracted for the third straight quarter. Activity data suggest that South Africa’s economy may also have contracted in Q3. Angola, the region’s third-largest economy, produces few timely measures of economic activity. But rumours of a financial crisis at the country’s state-owned oil firm have focused attention on the harmful effects of low oil prices. Ghana was a rare source of good news. Activity data suggest that growth remained stable (if weak) while a slowdown in inflation allowed the central bank to cut its key policy rate.