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Central banks in Sub-Saharan Africa bucked a recent “trend” of interest rate hikes in other emerging markets this month. Policymakers in South Africa, Nigeria, Kenya and Angola all kept their benchmark rates unchanged. The backdrop of rising US Treasury …
30th March 2021
SA Reserve Bank nowhere near a hawkish pivot South Africa’s monetary policy stance is likely to remain accommodative for some time, going against market expectations and the projection model of the Reserve Bank (SARB). This week’s decision to keep the …
26th March 2021
Policymakers in South Africa kept their benchmark rate unchanged at 3.50% today, breaking a recent wave of EM central bank decisions to tighten policy. We suspect that the country’s weak economic recovery and subdued inflation means that policy will stay …
25th March 2021
Soft inflation reading another reason to expect Reserve Bank to hold The fall in South Africa’s headline inflation rate, to 2.9% y/y, in February almost certainly rules out a hike in interest rates at Thursday’s MPC meeting. We think that the repo rate …
24th March 2021
Policymakers in Nigeria opted to keep their benchmark rate unchanged at 11.50% at today’s MPC meeting in the face of rising inflation and a weak recovery. We don’t think that a hawkish minority will turn into a majority in the coming months and, if …
23rd March 2021
Nigeria lying in economic bed policymakers made The past week has brought further evidence that Nigeria is suffering from stagflation and we suspect it’s a ‘chronic condition’ arising from poor policy choices rather than an ‘acute disease’. Price …
19th March 2021
South Africa’s Reserve Bank (SARB) is unlikely to be in a rush to follow other EM central banks in tightening monetary policy. We think the policy rate will be on hold this year and probably in 2022 too. This week has seen central banks in Brazil, Russia …
Nigeria’s budget deficit is set to narrow sharply this year as oil revenues increase and the government fails to meet ambitious capital spending plans. The shortfall should be easily covered by domestic borrowing but, if we’re right in expecting oil …
South Africa’s hard activity data for January show that virus-related restrictions meant that the economy started the year on a very weak footing. We think that the recovery will struggle to gain much momentum over the coming months. Activity data …
17th March 2021
Record-high food inflation pushing up headline rate The latest jump in Nigerian inflation, to 17.3% y/y in February is unlikely to prompt the central bank to tighten monetary policy as concerns about a weak recovery mount. Figures released today showed …
16th March 2021
Sub-Saharan Africa back to bond markets African policymakers seem to be turning increasingly to international bond markets to finance budget deficits this year. Last November, Côte d’Ivoire became the first country in Sub-Saharan Africa to issue sovereign …
12th March 2021
Tighter virus containment measures imposed in late-2020 in South Africa weighed on manufacturing and mining output in January. We think that industrial activity picked up more recently, but the recovery will be held back by power cuts, a slow vaccine …
11th March 2021
Even as Sub-Saharan Africa gradually opens its doors to visitors, tourism sectors in the region face serious hurdles and we think that African economies dependent on the industry may be one of the slowest to recover from the coronavirus crisis. Tourism …
10th March 2021
Recovery losing momentum The slowdown in the pace of South Africa’s recovery in Q4 was less sharp than expected, but the economy is unlikely to gather much momentum over the coming quarters and we still expect GDP to be around 2% below its pre-virus trend …
9th March 2021
SA: Easing lockdown to lift stranded economic boat Improving virus numbers allowed South Africa to ease containment measures this week, which is likely to inject much-needed momentum into the recovery. As of 1 st March, South Africa moved from lockdown …
5th March 2021
The reported (but unconfirmed) devaluation of one of Nigeria’s exchange rates would help to improve the public finances, but it would keep already strong price pressures elevated. We doubt that the latest tweak in Nigeria’s FX market will culminate in a …
3rd March 2021
South Africa’s economic pain easing The rise in South Africa’s manufacturing PMI in February suggests that the economy bounced back from around the turn of the year, and the recent easing of lockdown measures should support activity this month. But slow …
1st March 2021
South Africa: reading behind budget lines Finance Minister Tito Mboweni appears to have put rose-tinted glasses on when he delivered South Africa’s budget this week. We noted that, despite repeatedly claiming that the 2021 blueprint was not an austerity …
26th February 2021
The recent rally across almost all commodity prices is good news for resource-rich economies in Sub-Saharan Africa. Balance sheets in oil producing countries like Nigeria and Angola will get a boost from the pick-up in oil prices. And a surge in …
The South African 2021 budget unveiled today was anything but the “non-austerity” budget that Finance Minister Tito Mboweni claimed he was presenting. Indeed, the fiscal plans imply significant tightening and will, if implemented, stabilise the public …
24th February 2021
SA budget the first test of austerity commitment All eyes will be on Finance Minister Tito Mboweni when he delivers South Africa’s budget speech next Wednesday for any changes in the government’s fiscal consolidation plans. The poor public finances leave …
19th February 2021
Oil and non-oil sectors diverge as economy rebounds Nigeria’s Q4 GDP data showed that a poor performance in the oil sector was more than offset by a continued rebound in the non-oil economy. While we think that some of the headwinds facing the economy …
18th February 2021
South Africa’s hard activity data for December suggest that the economy avoided contraction in Q4, but the pace of the recovery slowed and is likely to remain weak. Activity data published by Stats SA today showed that, following a 4.0% y/y fall in …
17th February 2021
Inflation edges up and set to rise further, but SARB to stand pat The rise in South Africa’s headline inflation rate, to 3.2% y/y in January, is likely to be followed by further increases over the next few months but, with the economic recovery still …
Inflation rises again, but CBN in no mood to tighten policy The latest jump in Nigerian inflation, to 16.5% y/y in January, on the back of surging food price pressures, is likely to increase pressure on the central bank (CBN) to tighten monetary policy. …
16th February 2021
AstraZeneca vaccines in Africa: to jab or not to jab? Disappointing news from an AstraZeneca trial will further complicate vaccination campaigns across Sub-Saharan Africa. But heavy reliance on this jab is limiting policymakers’ alternative options. The …
12th February 2021
The upside surprise in South Africa’s mining and manufacturing output in December is unlikely to be repeated in early 2021. Tighter virus containment measures and continued power cuts probably mean that the pace of the recovery has slowed. Activity data …
11th February 2021
Problems at South Africa’s state electricity firm, Eskom, are an increasingly painful thorn in the side of the economy with higher tariffs and an overhaul of the firm’s finances needed to put it on a sustainable footing and upgrade the country’s energy …
10th February 2021
Disappointing vaccine developments mean that policymakers in Africa could be forced to keep restrictions on activity in place for longer, delaying economic recoveries and deepening scarring effects. Many Sub-Saharan African economies have endured second …
8th February 2021
Debt restructuring “wave” more of a ripple Zambia has become the latest country – after Chad and Ethiopia – to seek debt restructuring under the G20’s Common Framework, but tough negotiations lie ahead and few other countries are likely to go down a …
5th February 2021
Economy not out of the woods The rise in South Africa’s manufacturing PMI in January appears to hide underlying weakness in activity on the back of virus-related restrictions. Even with some signs of a break in the clouds over South Africa’s economy, we …
1st February 2021
Kenya: more room for fiscal manoeuvre? Policymakers in Kenya appear to be exploring options to open up fiscal space to boost the recovery, seemingly with the IMF’s blessing. It is not entirely clear what central bank governor Patrick Njoroge was referring …
29th January 2021
Governments across Sub-Saharan Africa seem to have mixed plans for fiscal policy this year. There are signs that policymakers in some countries – including Nigeria, Ghana and perhaps Kenya – will continue to provide stimulus in 2021, reducing the risk of …
28th January 2021
Overview – The second waves of COVID-19 currently ripping through Sub-Saharan Africa will keep economic activity depressed over the coming months and, even once vaccines belatedly reach the region, recoveries will remain sluggish. The three largest …
The recent rise in inflation appears to have stayed the hand of Nigeria’s central bank from delivering more monetary easing at today’s MPC meeting. But, as price pressures drop back towards the end of this year, we think that policymakers will lower the …
26th January 2021
South Africa pulling the plug from SOEs? The South African government’s decision this week to provide no further debt guarantees to state-owned lender Land Bank underscores the mounting pressure on the public purse. Since defaulting on some of its debt …
22nd January 2021
Policymakers in South Africa looked through the recent virus-related deterioration in economic conditions and kept the policy rate unchanged, at 3.50%, today. As the recovery struggles to gain momentum, monetary conditions will probably stay loose for …
21st January 2021
Inflation edges down, rate cut likely on Thursday The further drop in South Africa’s headline inflation rate, to 3.1% y/y in December, coming alongside the recent tightening of virus containment measures supports our view that the Reserve Bank will cut …
20th January 2021
The rise in oil prices this year is likely to prove insufficient to remove strains in African oil producers’ balance sheets. Currencies in Nigeria and Angola will have to weaken further, and policymakers may turn to more desperate or draconian measures to …
18th January 2021
Propping up Africa’s vaccine supply The announcement that the African Union (AU) has secured a large COVID-19 vaccine order is a positive step towards Africa’s recovery from the coronavirus crisis, but the road remains long and bumpy. Reports suggest that …
15th January 2021
Inflation through the roof, monetary easing off the cards for now The latest jump in Nigerian inflation, to 15.8% y/y in December, on the back of mounting food price pressures will probably take monetary easing off the table in the near term. Figures …
Unhappy new year in South Africa There are no signs of South Africa’s COVID-19 outbreak abating – even though tougher restrictions were imposed last month – which will keep the costs of the pandemic high in the coming months. A second wave, officially …
8th January 2021
Dark clouds gathering over recovery The fall in South Africa’s manufacturing PMI in December points to the recovery grinding to a halt at the end of 2020. The recent tightening of virus containment measures, and the slow and limited access to vaccines …
Recently-announced measures to curb South Africa’s second wave of COVID-19 will probably throw the economic recovery off course, with GDP likely to contract in Q1 if restrictions are extended. We think that the darkening clouds over the recovery will …
4th January 2021
The latest national accounts data from Sub-Saharan Africa tell a story of the good, the bad and the ugly. South Africa’s economy mounted a surprisingly strong recovery in Q3, and a solid rebound in Nigeria’s non-oil sector more than offset weakness in the …
18th December 2020
Trials and tribulations of COVAX Reports this week pointed to the multilateral COVAX facility’s high risk of failure, which would delay many African countries’ access to vaccines and the ensuing economic benefits. South Africa, for its part, missed a …
After the storm of 2020, policymakers in Sub-Saharan Africa will be hoping for calm in 2021. But with vaccine distribution posing a key challenge in the region, economic recoveries may be slower than other parts of the world. And debt relief initiatives …
16th December 2020
Higher and higher Another jump in Nigerian inflation, to 14.9% y/y in November, is likely to be followed by elevated readings in the coming months. But as the headline rate peaks, probably in early 2021, we think that policymakers will resume their …
15th December 2020
Zambia and the IMF: high hopes The confirmation this week that Zambia is seeking an IMF funding program is a positive step, which is likely to improve the chances of a wider debt restructuring deal with external creditors. An IMF deal would lend more …
11th December 2020
Victory for Nana Akufo-Addo in Ghana’s presidential election this week increases the likelihood of fiscal stimulus in the near term, which would support the economic recovery. But the precarious state of the country’s public finances mean that austerity …
