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Data published this week showed continued weakness in South Africa’s economy at the start of the year which, coming alongside soft inflation, may bring interest rate cuts onto the table sooner than we currently anticipate. Elsewhere, the lack of public …
15th March 2019
Activity data released today showed that South Africa’s economy faltered in January, but we think that conditions will improve later this year. Weak growth and low inflation will add to pressure for a rate cut. … South Africa: Economy has weak start to …
14th March 2019
The first figures from Q1 support our view that economic growth in Nigeria will be slower than most expect this year. Rather than accelerating, weakness in the oil sector, tight fiscal policy, and poor confidence will cause growth to slow over the coming …
12th March 2019
Talk of “nationalising” the South African Reserve Bank (SARB) put pressure on the rand last week. The move – which would bring the Bank in line with global norms – would have no effect on the bank’s independence. But it would still probably lead to a …
11th March 2019
Growth figures out this week showed that South Africa’s economy slowed at the end of last year. But we think that improved confidence will boost investment this year, causing growth to pick up. The country’s energy regulator denied Eskom’s request for a …
8th March 2019
Fears about a sharp rise in yields if South Africa loses its final investment grade rating on local currency debt look overdone. Most of the bad news already appears to be priced in. … South Africa: (another) downgrade already priced …
7th March 2019
South Africa’s current account deficit narrowed to 2.2% of GDP in Q4, but this was more due to weak demand than stronger exports. We expect that the shortfall will widen out again this year. … South Africa Current Account …
Growth in South Africa’s economy slowed to 1.4% q/q (saar) in Q4 of last year, but looser financial conditions and a likely fall in inflation mean the economy should strengthen over the course of this year. … South Africa GDP …
5th March 2019
South Africa’s manufacturing PMI fell to 46.2 in February after rolling power cuts hit sentiment in the sector. But we doubt that the actual fall in activity will be as severe as the survey suggest. … South Africa Manufacturing PMI …
1st March 2019
Markets surged when Muhammadu Buhari was elected president of Nigeria in 2015, but they slumped following his re-election this week. This is just another sign that investors have soured on the president and his interventionist economic policies. We think …
Nigeria’s President Muhammadu Buhari’s clear win in last weekend’s election will almost certainly result in the continuation of his interventionist economic policies, which are widely seen to have slowed growth and depressed foreign investment. President …
28th February 2019
Results released so far suggest that Nigerian President Muhammadu Buhari probably won Saturday’s election. Another term for Mr. Buhari would mean the continuation of his growth-sapping policies. … Nigeria: Early results point to narrow win for …
26th February 2019
History suggests that, if Nigeria’s delayed election on Saturday passes peacefully, the stock market is likely to see a temporary bounce. But over a longer time horizon, global factors are likely to be the bigger driver of local asset prices. Meanwhile, …
22nd February 2019
The wider-than-expected South African fiscal deficit projections announced in today’s budget are a result of measures to deal with the financial troubles of Eskom and other struggling state-owned companies. It looks like the underlying fiscal stance will …
20th February 2019
South African inflation dropped by more than expected in January and is likely to fall further in the middle of the year, increasing the chances that the rate cuts that we expected in 2020 will be brought forward. … South Africa CPI …
We wouldn’t read too much into the recent decline in South African unemployment; the measure tells us little about the country’s economic cycle. While many factors contribute to high levels of structural unemployment, the most important is the failing …
19th February 2019
Nigeria’s presidential election on Saturday offers a choice between two clearly distinct policy options. The result will be close, with the winner probably announced on Monday. Elsewhere, South Africa’s finance minister will use his budget speech on …
15th February 2019
December’s activity data supported our view that growth probably stabilised at about 1% q/q saar in Q4. Despite growing worries about power cuts, we expect that growth will pick up in 2019. … South Africa: Activity data suggest soft end to …
14th February 2019
South Africa’s rolling blackouts anger many, but seem to cause little economic damage. The big risk is that the government will prolong the crisis by propping up Eskom, rather than seriously reforming it. … South Africa: The economic costs of load …
13th February 2019
Nigeria’s economy accelerated to 2.4% y/y in Q4, but momentum in the non-oil sector remained very weak. Low oil prices will weigh on growth in 2019, but the longer-term outlook depends heavily on the result of Saturday’s presidential election. … Nigeria …
12th February 2019
On Saturday, Nigerian voters will face a choice between two radically different policy options. A win for opposition leader Atiku Abubakar would boost local markets, but he would probably struggle to enact his investor-friendly plans. Another term for …
11th February 2019
President Cyril Ramaphosa used a key speech yesterday to promise to reform South Africa’s state-owned utility and to pitch himself as a gradual reformer in the lead-up to a national election now set for 8th May. … South Africa: Ramaphosa focuses on Eskom …
8th February 2019
South African President Cyril Ramaphosa’s plan to split Eskom into three is a welcome sign that Pretoria is willing to consider serious, structural reforms to the troubled electricity utility. Fiscal figures released this week highlight the budget …
Kenya’s current account deficit remains a vulnerability, but we don’t think that it poses a threat to the economy this year. In fact, we think that the deficit will narrow further in 2019 as oil prices fall and railway-related imports decline. … Kenya: …
7th February 2019
The first raft of South African data suggest that growth remained soft going into this year. But we think that growth will pick up later this year as inflation eases and confidence returns. … South Africa: Early signs point to weak start to …
6th February 2019
Kenyan policymakers left their key policy rate unchanged this week, and we think that they will hold rates over the remainder of the year. Peers in Angola and Ghana – who cut this week – will probably continue to loosen policy over the coming months. Next …
1st February 2019
Manufacturing PMIs in South Africa and Nigeria both pointed to weak growth in January. Forward-looking measures, however, support our view that growth in South Africa will pick up later this year. … South Africa & Nigeria Manufacturing PMIs …
Fears that troubles at South Africa’s public power firm will lead to another downgrade of the state’s credit rating seem overdone. Over the long term, however, the utility is not sustainable. Securing the power supply will require further investment, …
31st January 2019
The latest figures suggest that Africa’s key economies stumbled in late 2018 and early 2019. Growth in South Africa probably slowed in the final quarter of last year (though it remained strong by recent standards), while low oil prices and faltering …
30th January 2019
With inflation set to remain within target, we expect that Kenyan policymakers will leave their key rate on hold this year. Their Angolan and Ghanaian counterparts, however, will continue their easing cycles. … Africa rates: Kenya on hold, Ghana & Angola …
28th January 2019
Given Kenya’s fragile external position, plans for more foreign currency debt will increase the economy’s vulnerability to external shocks. Policymakers at the Central Bank of Nigeria showed no sign of shifting their controversial policy stance this week, …
25th January 2019
After a very weak 2018, we expect that growth in Sub-Saharan Africa will strengthen this year. The major oil exporters will, of course, suffer the effects of lower oil prices and our growth forecasts for Nigeria and Angola are below-consensus. But most …
24th January 2019
The sharp fall in South African inflation in December adds to the evidence that the SARB’s much-heralded tightening cycle is now dead in the water. We expect that inflation will remain within target this year, and that attention will soon turn back to …
23rd January 2019
Nigerian policymakers held their key rate at 14.00% today, and reiterated their support for the closely managed FX system. The controversial FX regime will almost certainly remain in place, unless a win for the opposition in next month’s closely-fought …
22nd January 2019
Policymakers in South Africa toned down their hawkish language at their meeting this week, suggesting that rate hikes are now off the agenda. Elsewhere, Nigeria’s leading opposition politician laid out a bold economic reform plan. Given divisions within …
18th January 2019
South African policymakers’ abrupt shift away from their previous hawkish rhetoric suggests that further rate hikes are now unlikely. We think that attention will soon turn to cuts; we expect a 25bp cut in 2020. … South Africa: SARB abandons hawkish …
17th January 2019
November retail sales figures added to the evidence that South Africa’s economy slowed a touch in Q4. But economic growth was robust by recent standards, and we think that conditions will improve in 2019. … South Africa: Slight slowdown in …
16th January 2019
South African output data released this week suggested that the economy slowed a touch in Q4. Even so, growth was still pretty strong by recent standards. Elsewhere, a coup attempt in Gabon revived memories of Africa’s chaotic 1970s. But such crises are …
11th January 2019
November’s slowdown in manufacturing growth supports our view that GDP growth eased in Q4 after a very strong Q3. But activity still remained strong (by local standards) and we think that headline growth will accelerate in 2019. … South Africa …
10th January 2019
Figures released in Kenya this week have strengthened our view that the country will be one of Africa’s fastest-growing economies of 2019. Meanwhile, the settlement between South African telecoms giant, MTN, and the Nigerian authorities has calmed …
4th January 2019
Strong growth in Q3 and the recent fall in oil prices suggest that Kenya’s economy will perform well going into 2019. Despite lingering structural problems, we’ve raised our growth forecast for this year. … Kenya: Solid momentum, low oil prices boost …
3rd January 2019
Nigerian President Muhammadu Buhari laid out his 2019 budget proposal this week, emphasising that he plans to keep key policies unchanged if he is re-elected in February. A big bank merger in the country has prompted fears of instability in the sector, …
21st December 2018
Figures released this month showed that Sub-Saharan Africa’s largest two economies remained weak in late 2018, but that activity picked up faster elsewhere in the region. These readings strengthen our view that Africa’s smaller economies will continue to …
20th December 2018
President Muhammadu Buhari’s 2019 spending plan would cut the federal deficit and leave key policies unchanged. Given political uncertainties, however, today’s speech is a poor guide to policy outcomes. … Nigeria: President Buhari promises policy …
19th December 2018
Angola’s $3.7bn deal with the IMF adds to the evidence that President João Lourenço is making a real shift towards more orthodox policymaking and while growth will stay weak in the near-term, economic reforms will help to improve the country’s long-term …
14th December 2018
Retail sales figures released today add to the evidence that South Africa maintained robust growth at the start of Q4. Inflation remained high in November, suggesting another rate hike in Q1 2019. … South Africa: More signs of strong start to …
12th December 2018
Activity data for October suggest that South Africa’s economy retained the momentum it picked up in Q3. Even so, we retain the view that growth will probably slow over the coming months. … South Africa: Activity data points to strong start to …
11th December 2018
The move towards land expropriation without compensation in South Africa has prompted fears of a Zimbabwe-style ‘land grab’. But examples from Asia show that land reform can be a success. … South Africa land reform: More Taiwan than …
10th December 2018
Nigeria’s economy accelerated very slightly in Q3, but conditions remained very weak. Headwinds, including low oil prices, are still building, adding to the downside risks to our view that growth will accelerate in 2019. … Nigeria GDP …
An opaque out-of-court settlement between Nigeria’s government and MTN would do little to improve perceptions of the country’s business environment. Elsewhere; South Africa’s economy returned to growth in Q3, but recent developments suggest that …
7th December 2018
