Africa

Côte d’Ivoire

Debt restructuring talks inching forward

The threat of messy outcomes to Sub-Saharan Africa’s debt problems seems to have diminished recently. In Zambia, the new administration vowed to tackle debt problems and press on with restructuring talks under the G20’s Common Framework. And Ethiopia, another participant in the programme, held its first creditor meeting as a political crisis reignited debt concerns. Even so, debt restructuring negotiations will not be smooth sailing, especially following recent revelations that Zambia’s debt owed to China may be substantially larger than officially reported. And elsewhere, debt problems may come back to bite down the line. While immediate risks in South Africa and Ghana are low, policymakers will need to undertake large fiscal consolidation to stabilise public debt-to-GDP ratios.

30 September 2021

Economic damage report from latest virus waves

The evidence from the latest COVID-19 waves sweeping through Sub-Saharan Africa point to a smaller economic blow compared to previous waves. Of course, there is a considerable degree of divergence, especially between countries imposing harsh restrictions – such as Uganda and Kenya – and those with more light-touch measures, like Nigeria or Ghana. Outside of South Africa, there is little sign that daily new cases are about to peak, suggesting that curbs to tame outbreaks will remain in place and continue to dampen activity. Worryingly, low vaccination rates across the region mean that economies will suffer under on-and-off restrictions with the emergence of any new virus waves.

27 August 2021

Third wave fears grow

Worries about a third wave of COVID-19 in the region have intensified in the past month and the tightening of lockdown measures in some countries – most notably South Africa – will weigh on recoveries. As things stand, surges in cases appear concentrated in countries in the south of the continent; cases have trended down in many of the region’s other large economies (e.g. Nigeria, Ghana and Ethiopia). With vaccine rollouts progressing at a snail’s pace amid low supplies across the region, fresh virus outbreaks will remain a persistent threat to the outlook. The glimmer of hope is that global powers are looking to increase vaccine supplies and, perhaps most importantly, China could be in a position to flood the world with easily-deployable jabs later in the year.

24 June 2021
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Oil producers heading into deeper crises

The plunge in global oil prices has raised the risk of much steeper contractions in output in African oil producers, sharper currency falls, sovereign debt restructurings and problems at local banks.

Côte d’Ivoire: Election clouds robust growth outlook

Côte d’Ivoire’s upcoming elections in 2020 raise political risks facing the economy. But our core view is that the vote will pass peacefully, and that looser fiscal policy combined with more favourable external conditions will boost growth to 7.5% next year.

8 October 2019

Ghana & Côte d’Ivoire: Cocoa cooperation remains limited

The Ghanaian and Ivorian authorities’ failure to agree on a harmonised farm-gate cocoa price dampened hopes of a ‘Choc-OPEC’ that could effectively influence the global market. But collaboration in other areas – like agricultural research – will boost the industry over the longer term.

Africa: Politics grabs headlines as key economies strengthen

Attention this month focused on unfolding political dramas in Africa’s key economies. The president of South Africa narrowly saw off another no-confidence vote, Kenya’s president was re-elected in a vote that the opposition claim was rigged, and Nigeria’s ailing leader returned to work after a long battle with an undisclosed illness. Angola elected its first new president for 38 years, with early signs suggesting that the long-ruling MPLA remained in power. None of these events, however, will have much of an economic effect. Recent activity figures have mostly supported our existing views. New figures suggest that the economies of Nigeria and South Africa both strengthened in recent months. We expect that data released in September will show that both countries exited recession in Q2. Kenya’s economy also seems to have picked up a bit in Q2, while Angola’s remained weak.

Recovery in top economies will drive African rebound

We expect that growth in Sub-Saharan Africa will accelerate over the coming years as the three largest economies in the region – South Africa, Nigeria and Angola – recover from recent recessions. Indeed, our GDP forecasts for these countries in 2017 and 2018 all sit above the consensus. Growth in most other African economies is likely to be relatively stable, although a key exception is Kenya where balance sheet vulnerabilities are mounting and we expect that growth will weaken in 2017. Inflation is set to slow in most countries, meaning that the majority of central banks will lower interest rates over the course of 2017-18. In financial markets, we expect that most currencies will weaken, but at a gentler pace than in 2016.

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