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Ripple effects of tighter global financing conditions African financial markets are not insulated from the tightening of global external financing conditions, and recent currency weakness and rising sovereign bond yields in the region will only add to …
17th June 2022
The latest data from Nigeria suggest that the economic rebound slowed further at the start of Q2, and we think that the recovery will remain lacklustre over the coming quarters. The weakness of the economy may give monetary policymakers second thoughts …
16th June 2022
Weak recovery to follow hit to SA industry, jump in Nigerian inflation South Africa’s activity data for April showed that flooding in a key province and renewed power cuts dealt a big blow to industrial sectors, while retail sales held up well. GDP …
15th June 2022
Nigeria’s presidential race: an uninspiring choice Nigeria’s two main political parties have selected presidential contenders, setting the scene for a long campaign season ahead of elections in February 2023. Lots can happen until then, but with more …
10th June 2022
Strong Q1 to lift growth in 2022 South Africa posted stronger-than-expected GDP growth of 1.9% q/q in Q1 and, while the economy is unlikely to sustain such a robust performance over the coming quarters, we have revised up our GDP growth forecast for this …
7th June 2022
Unfavourable shifts in commodity prices, the effects of drought and a slow rebound in the tourism sector will hold back Tanzania’s economy over the next couple of years. But while the near-term outlook is weaker than most think, President Hassan’s …
6th June 2022
South Africa’s fuel levy cut: round two The authorities in South Africa once again stepped in to supress the rise in local petrol prices on the back of the war in Ukraine and, while this will contain fuel price pressures in the near-term, the fiscal costs …
1st June 2022
Partial rebound underway in manufacturing sector The rebound in South Africa’s manufacturing PMI last month reversed some of its losses in April, but the recovery in the manufacturing sector is on shaky footings given ongoing power cuts. And price …
African central banks have turned up their hawkish noises over the past month. Policymakers in Nigeria and Kenya delivered their first interest rate hikes following pandemic-era cuts. In South Africa, the Reserve Bank stepped up the pace of its tightening …
31st May 2022
CBN governor: in or out? Reports this week suggesting that Nigeria’s central bank (CBN) governor, Godwin Emefiele, had been sacked have subsequently been denied by officials. Even so, the rumours did no good for the CBN’s independence and, with or without …
27th May 2022
The outsize role of agriculture in Sub-Saharan African economies and the tendency to rely on imported food products makes the region particularly vulnerable to the agricultural shock caused by the war in Ukraine. In addition to the risk of food shortages, …
25th May 2022
The Central Bank of Nigeria (CBN) delivered a surprise 150bp interest rate hike, to 13.00%, today amid mounting inflation and balance of payments concerns. We expect rates to be raised by another 100bp, to 14.00%, in July but further tightening seems …
24th May 2022
Economy will continue to lose steam Nigeria’s GDP growth slowed to 3.1% y/y in Q1 as robust growth in the non-oil sector was more than offset by a slump in the oil sector. Looser fiscal policy ahead of elections in early 2023 will provide some support to …
23rd May 2022
Central bank hawks ascend amid market ruffles Recent investor risk-off sentiment has pushed up sovereign dollar bond yields across Sub-Saharan Africa, fuelling debt risks further. And central banks appear to be taking note, with some policymakers turning …
20th May 2022
Policymakers in South Africa upped the pace of tightening today, raising the repo rate by 50bp to 4.75%, as concerns about inflation (and inflation expectations in particular) have grown. We don’t think that the hawks will have their way for long though …
19th May 2022
Activity struggling even before hit from floods South Africa’s activity data for March were weak and that was even before flooding in KwaZulu-Natal province dealt a fresh blow to the economy. Inflation figures released earlier today may have increased the …
18th May 2022
Rise in core inflation raises risk of 50bp hike tomorrow South Africa’s headline inflation rate remained close to the upper bound of the Reserve Bank’s 3-6% target range in April, at 5.9% y/y, and will stay there over the coming months. Tomorrow’s …
Latest rise in inflation puts pressure on CBN to tighten Inflation in Nigeria jumped to 16.8% y/y last month and the headline rate is likely to rise further as spillovers from the war in Ukraine filter through. Pressure to tighten monetary policy is …
16th May 2022
Monetary politics in Nigeria Presidential guidance requiring the resignation of current government officials running for Nigeria’s highest office will likely leave the central bank without a governor as he is set to contest the presidential ticket, …
13th May 2022
The South African Reserve Bank is set to shake up its monetary policy setup. This Update provides some clarity on what policymakers will do and why, and what it means for monetary and credit conditions. What is the Reserve Bank planning? In November 2021, …
11th May 2022
Green shoots in SA recovery repeatedly uprooted Recent flooding in a key province and warnings this week that power cuts could reach unprecedented levels are the latest in a long list of blows to South Africa’s economy that have repeatedly stifled any …
6th May 2022
Overview – Sub-Saharan Africa’s recovery is likely to remain slow going and our growth forecasts are generally below the consensus. While spillovers from the war in Ukraine will boost a handful of economies – notably Angola and Nigeria – in others, the …
4th May 2022
Manufacturing sector knocked down in early Q2 The plunge in South Africa’s manufacturing PMI in April suggests that there was a large blow to activity from flooding in a key province and renewed power cuts. One consequence of this economic weakness is …
3rd May 2022
South Africa’s ANC: reforms gaining momentum? Momentum appears to be building within South Africa’s ruling ANC party to shift towards a more private sector-led economic model. But given its track record so far, we wouldn’t hold our breath. An ANC draft …
29th April 2022
Fiscal positions across Sub-Saharan Africa have been a persistent source of concern since the onset of the pandemic – and in some cases, even before. And the commodity price moves resulting from the war in Ukraine will be unfavourable for public finances …
28th April 2022
European officials have increasingly looked to Africa to replace gas supplies from Russia. In principle, the continent’s major producers like Nigeria and Angola (and in the medium term, potentially Mozambique and Tanzania) could benefit. But it’s unclear …
22nd April 2022
Inflation near top of target range The rise in inflation in South Africa in March, to 5.9% y/y, will keep the Reserve Bank’s tightening cycle going at the next meeting in May. But the weakness of core inflation supports our view that interest rates will …
20th April 2022
Floods another blow to SA’s growth momentum This week’s floods in South Africa’s KwaZulu-Natal province are the latest in a series of hits to the economic recovery. Violent unrest last July dealt a heavy blow to the economy and October’s steel sector …
14th April 2022
Activity figures paint downbeat picture South Africa’s hard activity data for February were a stark contrast to the recent upbeat surveys as output dropped back in the mining, manufacturing and retail sectors. Electricity problems, fiscal austerity and …
South Africa’s headline inflation rate will stay close to the upper bound of the central bank’s 3-6% target range in the coming months before falling sharply in the second half of the year. Some MPC members are in a hawkish mood, but we think that …
13th April 2022
Africa putting COVID-19 in the rear view mirror? Governments across Sub-Saharan Africa have scaled back COVID-19 restrictions in recent weeks and, despite low vaccination coverage, it seems the virus will be less disruptive to activity going forward. But …
8th April 2022
Ghana’s economic recovery will remain sluggish over the next couple of years as policy is tightened in a bid to shore up the public finances and tackle high inflation. The risk of an imminent sovereign default appears low but, if fiscal consolidation …
SA officials to give ground on public wages? Public sector wage negotiations will soon kick off in South Africa and there are reasons to think that officials may concede further ground to trade unions. A surging wage bill has been a key driver of the …
1st April 2022
Solid recovery in Q1 will add to SARB’s hawkishness The further rise in South Africa’s manufacturing PMI in March to a record high provides further evidence that the economy has rebounded strongly from the Omicron-driven dip in activity at the end of last …
Spillovers from the war in Ukraine will have a varied impact across Sub-Saharan Africa. Large oil producers such as Nigeria and Angola are benefitting from the surge in global oil prices but, for the rest of the region, it is worsening their terms of …
31st March 2022
The latest data from Nigeria suggest that the economy strengthened at the start of this year. But there are growing signs that the central bank’s draconian foreign exchange policies are leading to shortages of goods that are fuelling inflation and likely …
30th March 2022
Ghana: interest rates up, gov’t spending down The Ghanaian authorities took steps this week to shore up the cedi and tackle the poor public finances but, even though a sovereign default is not imminent, officials may eventually have to back down and turn …
25th March 2022
The upside inflation risks created by the war in Ukraine and the solid performance of South Africa’s economy prompted the Reserve Bank to push ahead with its tightening cycle today, raising the repo rate by 25bp to 4.25%. We maintain our view that rates …
24th March 2022
Shifts in commodity prices in response to the war in Ukraine will provide a sizeable boost to current account positions in Angola and (to a lesser extent) Nigeria this year. Elsewhere, however, higher energy import bills will more than offset any increase …
23rd March 2022
Inflation unchanged, but SARB to press ahead with tightening South Africa’s headline inflation rate was unchanged at 5.7% y/y in February but, with the war in Ukraine increasing upside inflation risks and signs that the economic recovery has been robust …
In this Update , we roll out our sovereign debt heat map that provides a snapshot of debt risks across Sub-Saharan Africa. The pandemic has increased debt burdens across the continent and, with elections on the horizon in many places, governments are …
21st March 2022
Nigerian economy feeling the pain from FX policies Evidence is building that Nigeria’s unorthodox exchange rate regime is fuelling inflation and increasingly damaging economic activity. Policymakers at the central bank have been reluctant to let the naira …
18th March 2022
Recovery picking up pace January’s hard activity data show that South Africa’s recovery gained ground following the Omicron virus wave. Taken together with more timely figures that point to a continued rebound in activity and mounting inflationary …
16th March 2022
Inflation ticks up, pressure building on CBN to tighten The small rise in Nigeria’s headline inflation rate to 15.7% y/y last month provides further evidence that draconian foreign exchange policies are causing shortages and fuelling price pressures. …
15th March 2022
High oil prices dashing upside risks to SA activity… The latest economic data suggest that South Africa’s recovery has gained ground, and some sectors will benefit from elevated metals prices caused by the war in Ukraine. But at a macro level, a mounting …
11th March 2022
Economy weathered Omicron breeze in Q4 South Africa posted decent GDP growth of 1.2% q/q in Q4, shrugging off the Omicron virus wave. While elevated commodity prices will support the economy over the coming months, growth is likely to slow considerably in …
8th March 2022
Flies in the ointment for African oil producers’ gains Oil prices have surged this week, but Africa’s main oil exporters – Nigeria and Angola – are unlikely to reap the full benefits due to persistent oil output problems and the mounting costs of fuel …
4th March 2022
Manufacturing recovery gathers speed The rise in South Africa’s manufacturing PMI in February suggests that the rebound in the sector picked up pace. But headwinds facing the industry and the wider economy mean this strength is unlikely to last. Figures …
1st March 2022
Elevated commodity prices on the back of the Russia-Ukraine crisis will almost certainly add to inflationary pressures across Sub-Saharan Africa. High prices for energy, metals and agricultural products that African countries export seem to have shielded …
28th February 2022
The fallout from the Russia-Ukraine conflict for SSA Direct economic and financial ties between Sub-Saharan Africa and the economies of Russia and Ukraine are limited, but African policymakers will have to contend with the indirect repercussions of the …
25th February 2022
