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South Africa’s president provided essentially no policy detail in yesterday’s ambitious State of the Nation speech. Indeed, he seems to have walked back his plan of a relatively modest restructuring the state’s failing energy firm. This suggests to us …
21st June 2019
Inflation remained at the 4.5% mid-point of central bank’s target range in May, providing the space for policymakers to support the economy by cutting their key interest rate next month. … South Africa CPI …
19th June 2019
Nigerian inflation remained, at 11.4% y/y, above the central bank’s target range in May, but policymakers will probably still cut their key interest rate in July. … Nigeria CPI …
17th June 2019
Despite this week’s mixed messages from Nigerian officials, we doubt that the country’s FX system will be reformed anytime soon. In South Africa, the latest activity data suggest that the economy picked up in early Q2, but we still think that the SARB …
14th June 2019
Mining figures for April released today were softer than expected, but stronger conditions in the rest of the economy suggest that the second quarter started on a brighter note. This means that South Africa could dodge a technical recession. … South …
13th June 2019
Many of South Africa’s state-owned firms face financial and management troubles, but most – like South African Airways – pose little risk to the wider economy. Eskom and Transnet are the only two which really are ‘too big to fail’. Rescuing both firms …
12th June 2019
Manufacturing output jumped to a three-year high of 4.6% y/y in April. This provides the first sign that the economy returned to growth in Q2, thus dodging a technical recession. … South Africa Manufacturing …
11th June 2019
A political dispute over the mandate of South Africa’s Reserve Bank caused the rand to weaken this week. We doubt that the bank’s charter will be changed, but the row highlights intra-ANC divisions that will hobble efforts to reform the economy (which …
7th June 2019
The surprisingly-sharp 3.2% q/q saar fall in output in Q1 has led us to cut our 2019 full-year growth forecast to a below-consensus 0.5%. Given downbeat survey data for Q2, it is possible that the economy fell into another technical recession over the …
4th June 2019
South Africa’s manufacturing PMI dropped back to 45.4 in May, dampening hopes of a recovery after a weak Q1. The fall in the prices sub-component supports our view that the South African Reserve Bank will cut interest rates, perhaps as soon as July. … …
3rd June 2019
Dovish comments from the South African Reserve Bank this week support our view that an interest rate cut is likely to come as soon as July. Elsewhere, the drop in Kenyan inflation in May backed up the Central Bank of Kenya’s earlier decision to look …
31st May 2019
The inclusion of several investor-friendly ministers in South African president Cyril Ramaphosa’s new cabinet has been interpreted as a sign that the government may renew its push for reform. Local financial markets have rallied on the news. But Mr. …
30th May 2019
The latest developments support our non-consensus view that Angola’s economy will contract again in 2019. Taken together with falling inflation, the central bank’s easing cycle has further to run. … Angola: another year of …
28th May 2019
Central banks in South Africa and Nigeria left policy settings unchanged at their meetings this week but the accompanying communications supported our long-held view that interest rates will be cut later this year. In fact, we have brought forward our …
24th May 2019
Today’s MPC statement strengthened our view that policymakers at the SARB will cut rates soon. Indeed, a shift in opinion on the council has led us to move our forecast of a 25bp cut forward to July’s meeting. … South Africa: Rates on hold, but cuts …
23rd May 2019
Inflation in South Africa decreased to 4.4% y/y in April due to weaker core price pressures. We think that the headline rate will continue on a downward trend over the rest of the year. Combined with weak economic growth, we hold the non-consensus view …
22nd May 2019
Nigerian policymakers voted to hold their key rate at 13.50% today, but the governor’s suggests that they will continue to loosen policy later this year. The governor frequently stressed the need for stimulus, and we think that economic growth will remain …
21st May 2019
Nigerian GDP growth slowed to 2.0% y/y in Q1, strengthening our view that the economy will perform worse than most expect over the course of 2019. We think that today’s weak result will encourage policymakers to cut their key interest rate at their …
20th May 2019
Activity data out this week added to the evidence that South Africa’s economy contracted by about 2% in Q1. Figures out next week, by contrast, will probably show that growth accelerated in Nigeria. Unemployment, however, remains elevated in both …
17th May 2019
March retail sales figures released today added to the evidence that South Africa’s economy contracted by about 2.0% in Q1. This strengthens our belief that the next rate move will be a cut. … South Africa: Activity data point to grim result in …
15th May 2019
The latest changes to Kenya’s railway plan have focused attention on the Chinese-funded SGR project. But the country’s real debt problems surround its growing eurobond sales, which will increase with the sale of another US$2.5bn issuance this week. … …
14th May 2019
Zambia’s public debt position has long been untenable, but the situation is now escalating. The country faces the choice between fiscal tightening (possibly as part of an IMF debt deal) or a more acute crisis. … Zambia: Sliding towards a debt …
10th May 2019
The comparatively poor showing by South African President Cyril Ramaphosa’s ANC in Wednesday's election will probably weaken the reformist leader in his on-going struggle with intra-party rivals. Elsewhere, Nigerian President Muhammadu Buhari’s decision …
Activity figures for March were stronger than those for February, but it still looks almost certain that South Africa’s economy contracted in Q1. Conditions seem to have improved in April, and we think that growth over the year as a whole will pick up a …
9th May 2019
President Cyril Ramaphosa’s ANC is all-but certain to win this week’s election, but we’re sceptical that this will provide impetus to his sluggish reform drive. The ruling party will, after all, remain sharply divided. We expect that progress will be …
6th May 2019
We doubt that next week’s South African election will do much to boost President Cyril Ramaphosa’s reform drive. Elsewhere, Kenyan officials released a first draft of next year’s budget, with the figures supporting our view that the fiscal deficit will …
3rd May 2019
South Africa’s manufacturing PMI rose to 47.2 in April, providing a rare reason for optimism about the sector. This supports our view that economic conditions will strengthen in Q2. … South Africa Manufacturing PMI …
2nd May 2019
Figures released this month added to the evidence that African economies are struggling this year. The worst news was from South Africa and Angola, where recent activity data suggest that GDP actually fell in Q1. We also received very bearish signals from …
30th April 2019
The latest figures show that Kenya’s economy accelerated in 2018, but a worsening drought will cut growth this year. Elsewhere, a second cyclone is hitting Mozambique, dealing another blow to the country’s fragile economy. We published a new report on …
26th April 2019
PM Abiy Ahmed’s political and economic reforms have drawn attention to Ethiopia’s huge potential. But the process remains fragile and could easily be reversed. Developing a private sector-led development model will require a delicate combination of …
Soft inflation readings across Africa this week supported our view that policymakers will cut rates in key economies. New figures added to the evidence that South Africa stumbled in Q1, while Nigerian policymakers tried (and, in our view, failed) to …
18th April 2019
Retail sales figures for February added to the evidence that South Africa’s economy struggled in the first months of the year. Growth will probably pick up later this year, but it will remain weak, adding to the pressure for interest rate cuts. … South …
17th April 2019
Inflation in South Africa picked up to 4.5% y/y in March due to petrol prices, but we think that it will soon ease. We’re sticking to our non-consensus view that policymakers will cut late this year. … South Africa CPI …
As CBN Governor Godwin Emefiele’s term draws to a close, we’ve taken a look at how his controversial decisions worsened Nigeria’s recent economic crisis. Given President Muhammadu Buhari’s views on monetary policy, Mr. Emefiele’s replacement is unlikely …
16th April 2019
Inflation in Nigeria remained strong in March, and will probably stay above target over the coming months. Even so, we expect that will probably continue their controversial loosening cycle. … Nigeria CPI …
Activity data out this week added to the evidence that South Africa’s economy faltered in Q1. As we argue in our latest Outlook , problems in South Africa are a key reason why we think that regional growth will disappoint this year. Elsewhere, Mozambican …
12th April 2019
Economic growth across Africa as a whole will remain weak in 2019 due to very poor performances from Nigeria and South Africa. Conditions will probably improve next year, but regional growth will be weaker than most analysts expect. We think that East …
11th April 2019
The latest activity figures add to the evidence that growth in South Africa softened at the start of 2019. Conditions will probably pick up later in the year, but growth will remain tepid. … South Africa: Activity data point to weak …
Moody’s Ratings delayed the review scheduled for last Friday, leaving South Africa’s rating unchanged. Two new developments this week added to concerns about the country’s fiscal health. That said, we think fears that a downgrade would create serious …
5th April 2019
Rebounds in agricultural production will help to support economic accelerations this year in Kenya and South Africa. Elsewhere in Southern & Eastern Africa, however, the sector will drag on growth – particularly in Zambia and cyclone-hit Mozambique. … …
4th April 2019
Nigeria’s fiscal position is much weaker than widely believed. Government plans to focus on foreign borrowing will add to currency risk. And evidence suggests that the central bank is helping to finance the deficit, raising the risk of higher inflation …
3rd April 2019
South Africa’s manufacturing PMI slipped again in March, suggesting that power cuts and soft demand weighed on the sector. Though the measure has a tendency to overstate the weakness of manufacturing, today’s reading is another reason to expect soft …
1st April 2019
The upcoming Moody’s review of South African debt has raised fresh concerns about a sell-off in the country’s bond market. But we think that these fears are overdone. Meanwhile, central bank meetings this week reinforced our view that policymakers are …
29th March 2019
The South African Reserve Bank’s (relatively) dovish post-meeting communications support our view that the next move in interest rates will be down (probably in early 2020). The markets have moved towards our view and no longer expect hikes, but they …
28th March 2019
Figures released over the past month added to concerns that Africa’s largest three economies stumbled in early 2019. There was, admittedly, some good news from Kenya, where judges struck down a cap on commercial lending rates that had depressed the growth …
27th March 2019
Today’s rate cut was another signal that Nigerian policymakers are prioritising monetary stimulus over their own inflation target. We doubt that this cut – which will probably be the first in a cycle – will do much to boost growth. But it will further …
26th March 2019
South African retail sales figures released this week provided another sign of economic weakness, and worsening electricity problems will add to economic headwinds. A new budget report has raised fresh concerns about the financing of Nigeria’s fiscal …
22nd March 2019
Retail sales growth picked up in January, but activity data across the economy as a whole were weak at the start of 2019. Growth will probably remain subdued over Q1, but then strengthen later in the year. … South Africa: Growth faltered in early …
20th March 2019
South African inflation stayed low in February, and while it will probably pick up over the coming months, it will remain within target. We hold the non-consensus view that the next move will be a cut. … South Africa CPI …
The dramatic weakening of Ghana’s cedi has been driven by a decline in investor sentiment, and does not reflect a deterioration in underlying macro fundamentals. Given strong growth and supportive commodity prices, we expect that sentiment will turn and …
19th March 2019
