Filtered by Subscriptions: Africa Economics Use setting Africa Economics
The larger-than-expected South African current account deficit in Q3, of 3.5% of GDP, adds to the reasons to think that the Reserve Bank will tighten monetary policy a little further in the next few months. … South Africa Current Account …
6th December 2018
South Africa’s economy escaped recession in Q3, and the rebound was much stronger than we’d expected. But growth will probably soften in Q4 due to weaker agricultural growth and the imposition of power cuts by the troubled state electricity firm. … South …
4th December 2018
The rebound in South Africa’s manufacturing PMI to 49.5 in November is the latest sign that the economy is now recovering following a very weak performance earlier this year. Even so, we think that many analysts are too optimistic about the prospects for …
3rd December 2018
Lower oil prices will batter Africa’s big oil exporters. But they will benefit Africa’s oil importers, which make up the majority of the region’s GDP. Lower petrol prices will, for instance, sap inflation in South Africa – supporting our view that …
30th November 2018
The recent sharp fall in oil prices will add to headwinds facing the economies of Nigeria and Angola. We estimate that both country’s export revenues will have fallen by about a US$1bn over the past month. This will provide a big hit to government …
29th November 2018
African economies will probably remain among the fastest-growing in the world over the coming decades. But slow productivity growth will prevent convergence with high income countries. Indeed, we expect that Africa will fall further behind other …
It is very unlikely that the new Nairobi-Mombasa railway will, as Kenya’s government hopes, break even next year. But fears that the troubled line will push up to Kenya’s debt repayment costs are misplaced. … Kenya’s railway: Trouble ahead, but limited …
28th November 2018
Kenyan policymakers left their key policy rate at 9.00% today, and we think that they will maintain the current policy stance going into next year. … Kenya: Rates on hold into …
27th November 2018
Hawkish rhetoric from South Africa’s MPC suggests that another rate hike is likely in Q1. But the divided MPC’s appetite for further tightening will dissipate if – as we expect – inflation eases in mid-2019. Tanzania’s president continued his run of …
23rd November 2018
Hawkish rhetoric suggests that policymakers at the SARB will follow today’s 25bp rate hike with another rate rise in Q1. But we think that inflation will soon peak, and that rates will ultimately fall in 2020. … South Africa: SARB hikes, but cycle will …
22nd November 2018
Last month’s rise in South African inflation was almost entirely due to fuel prices, so we still expect that the SARB will keep its key rate unchanged at its meeting tomorrow. … South Africa CPI …
21st November 2018
Africa’s failure to develop export-orientated manufacturing sectors is holding back economic development across the region. We expect that this will remain a key weakness over the long term. Even in Ethiopia, which is often seen as a manufacturing …
20th November 2018
South Africa’s government has taken a big step towards the expropriation of land without compensation, but fears that land reform will disrupt the economy are overblown. Meanwhile, given weak economic growth and fading inflationary pressures, we think …
16th November 2018
The Bank of Uganda will probably buck the regional trend next year by tightening policy further in response to a widening current account deficit. This will add to headwinds for economic growth. … Uganda: Policy tightening to add headwinds to …
15th November 2018
September activity data released over the past week has been pretty downbeat. But conditions still seem to have improved in recent months, supporting our view that the economy returned to growth in Q3. … S. Africa: Economy probably escaped recession in …
14th November 2018
The raft of survey releases in South Africa this week provided contradictory messages, but on balance we think that conditions continued to improve at the start of Q4. Meanwhile, the news that the Mozambican government is closing in on deals to …
9th November 2018
South African manufacturing and mining data for September released today support our view that the economy pulled out of recession in Q3, but that growth was very weak. … South Africa Manufacturing & Mining Output …
8th November 2018
The Mozambican government’s preliminary agreement to restructure its eurobond looks like an important first step out of its long-running debt saga. But even if this goes ahead, significant fiscal tightening and a restructuring of bilateral and …
6th November 2018
Kenya’s plans for another US$2.5bn eurobond have added to our concerns about its burgeoning public debt. While a major debt crisis should be avoided if the country’s economy continues to grow rapidly, we are increasingly concerned that an external shock …
5th November 2018
Activity data released this week supported our view that economic conditions in Nigeria and South Africa were very weak in recent months. We think official GDP figures due out in late November and early December will show that both economies posted tepid …
2nd November 2018
The fall in South Africa’s manufacturing PMI is probably overestimating the weakness of the manufacturing sector, which we think continued to recover in October. Flattering base effects created by the recent recession mean that even a poor performance …
1st November 2018
Price pressures eased in Kenya and Uganda in October, and we think that inflation will remain within target in both countries. Kenyan policymakers will probably keep their key rate on hold in 2019, while their Ugandan peers will hike rates once more in …
31st October 2018
Policymakers in South Africa and Nigeria both laid out fiscal plans this month, but their responses to weak revenues were very different. South Africa’s new finance minister announced a wider deficit in 2019, while Nigerian officials promised to cut …
30th October 2018
South Africa’s new finance minister used this week’s budget statement to signal a shift away from further austerity, suggesting that Pretoria is prioritising support for the weak economy. Nigerian officials, by contrast, promised to tighten policy. Given …
26th October 2018
The government’s decision to accept a wider deficit rather than tighten policy to meet previous targets will push up debt levels. But so long as bond yields don’t rise sharply (which we doubt is likely) this should provide support to the flagging economy. …
24th October 2018
South African inflation stabilised in September remaining unchanged at 4.9% y/y. We think that inflation has peaked and expect that the SARB will keep its key rate on hold at next month’s policy meeting. … South Africa CPI …
South Africa’s new finance minister will probably announce further fiscal tightening in tomorrow’s Medium Term Budget Policy Statement in order to meet existing targets. This will likely placate ratings agencies, but supports our view that economic growth …
23rd October 2018
Worries about Africa’s rising public debt have focused on Mozambique and Zambia, but the situation elsewhere is less stable than it first appears. Nigeria’s debt position, for example, is very fragile. Full-blown crises may not be imminent, but we think …
22nd October 2018
Despite the weakness of the economy, South Africa’s new finance minister will probably use next week’s budget review to tighten fiscal policy, rather than to announce new stimulus measures. On a slightly more positive note, figures out this week did, at …
19th October 2018
August’s headline mining output figures were very poor. But it still looks like the economy as a whole finally escaped recession in Q3 due to recoveries in the retail and manufacturing sectors. … South Africa: Economy finally returning to …
18th October 2018
Economic growth in Sub-Saharan Africa will probably strengthen a touch in 2019, but growth across the region will remain weaker than consensus expectations. We think that growth in Nigeria will slow as oil prices fall and output stabilises. Meanwhile, the …
16th October 2018
Nigerian inflation remained essentially unchanged in September, which supports our view that – despite recent hawkish language – policymakers will leave their key rate on hold over the coming months. … Nigeria Consumer Prices …
The resignation of South Africa’s finance minister boosted the rand this week by demonstrating President Ramaphosa’s firm stance on corruption. Meanwhile, Nigeria’s key opposition party selected its presidential candidate – setting the stage for next …
12th October 2018
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 …
11th October 2018
Manufacturing figures released today supported our view that the economy exited recession in Q3. But growth probably remained weak by historical standards, which we think will forestall rate hikes. … South Africa Manufacturing Production …
Nigeria’s February 2019 election will offer a stark policy choice between stability under President Muhammadu Buhari and liberalising reforms under opposition leader Atiku Abubakar. While the vote will be close, President Buhari is probably the favourite …
10th October 2018
New GDP figures have presented a more flattering picture of Ghana’s economy, though obviously actual output remains unchanged. The Bank of Uganda hiked its key interest rate this week, adding to signs that Africa’s wave of policy loosening is over. …
5th October 2018
Angola will return to growth in 2019, but the recovery will probably be weaker than most expect. And we doubt that the worrying debt position will improve. Whereas the IMF expects that the public debt-to-GDP ratio will peak this year, we think that the …
4th October 2018
The continued fall of South Africa’s manufacturing PMI in September underlines the fact that conditions remained tough in Q3. While we think the economy probably exited recession, growth was very weak. … South Africa Manufacturing PMI …
1st October 2018
Central banks across Africa held their rates unchanged this week, strengthening our view that the region’s long loosening cycle has now come to an end. Nigeria’s election cycle will get into gear next week, as the opposition PDP selects its candidate for …
28th September 2018
Zambia’s debt situation is deteriorating rapidly, and concerns about hidden debts mean that the situation could be much worse than it appears. Given low debt servicing costs, a missed payment is unlikely in the short term. Debt restructuring, if it takes …
27th September 2018
Figures released over the past month showed that the South African and Angolan economies both contracted in the first half of the year, with South Africa entering a technical recession in Q2. Policymakers across the region held rates in September, but …
Nigerian policymakers struck a hawkish tone today, but we doubt that rate hikes are on the cards. Inflationary pressures are probably not as worrying as Governor Emefiele seems to believe. Kenyan policymakers left their key policy rate on hold again, and …
25th September 2018
President Ramaphosa’s US$28bn infrastructure fund is mostly made up of already-committed public spending, and the economic effect will be limited. Lower-profile reforms to visa rules, mining regulation, and utility pricing, however, will all improve the …
21st September 2018
Zambia’s debt worries escalated this week, and it’s increasingly difficult to see how the country can avoid a full-blown crisis. Elsewhere, yesterday’s MPC vote in South Africa was closer than we’d expected, but we still think that the SARB will keep …
Today’s split MPC decision in South Africa shows significant minority support for tighter policy. But if the hawks couldn’t swing today’s vote, it’s unlikely that they will succeed in pushing for a rate hike over the next six months or so – with the rand …
20th September 2018
South African inflation slowed to 4.9% in August, which supports our view that policymakers at the SARB will leave their key rate on hold at 6.50% at their meeting tomorrow. … South Africa CPI …
19th September 2018
Rwanda’s investment-focused and state-managed development model is delivering rapid growth and we expect the country to remain one of Africa’s fastest-growing economies. However, the government is still likely to miss its own ambitious economic targets. … …
18th September 2018
There are growing suggestions that the South African Reserve Bank will raise interest rates at its meeting next week, but the weakness of the latest activity data and of inflation expectations mean we think that it will keep rates on hold. Elsewhere, the …
14th September 2018
The latest retail sales figures add to the evidence that South Africa’s economy made a strong start to Q3 and our Tracker points to growth of 2-2.5% q/q saar. But there is mounting survey evidence that this momentum faded in August. … South Africa: a …
12th September 2018
