Local elections that take place in South Africa on Monday are unlikely to have a direct impact on macroeconomic policymaking, but a poor showing for the ruling ANC could intensify pressure on the government to row back on its austerity plans. One issue that may dominate voters’ thoughts is the growing prevalence of electricity shortages, which the state electricity firm has warned may get worse. Elsewhere, Nigeria appears to be edging towards an overhaul of its fuel subsidy system which would mark a positive step in terms of its external and fiscal positions but, in the near-term, would keep inflation elevated.
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