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The stronger-than-expected growth in South African manufacturing recorded in July suggests that the economy made a good start to Q3. But more timely surveys indicate that this momentum hasn’t been maintained over the course of the third quarter. … South …
11th September 2018
Figures released this week showed that South Africa’s economy performed even worse than we’d thought in Q2. Headline growth will probably recover in the second half of the year, but we’ve downgraded our full-year forecast from 1.3% to 0.8%. Elsewhere, …
7th September 2018
Attention focused on China-Africa ties this week as leaders from across the continent met with Chinese President Xi Jinping in Beijing for a major summit. In this Update we attempt to situate the summit in the broader context of China-Africa relations. … …
6th September 2018
The improvement in South Africa’s current account deficit in Q2 should help to ease concerns about the country’s external financing needs and provide some support to the rand. Coming alongside the weakness of the latest GDP data, it reinforces our view …
South Africa’s economy formally entered recession in Q2 driven by another poor performance from the agricultural sector. We expect the economy to embark on a recovery over the rest of this year, but a sharp rebound is unlikely. Today’s data will further …
4th September 2018
The collapse in South Africa’s manufacturing PMI in August may partly reflect a deterioration in sentiment related to the turmoil in EM financial markets last month. Even so, the data provides an early sign that hopes for a sharp rebound in growth in the …
3rd September 2018
Nigeria’s economy slowed in Q2, despite stronger non-oil growth. More recently, an unexpectedly big fine imposed on MTN this week will raise questions about the country’s regulatory environment. The British PM’s visit to Africa didn’t result in many …
31st August 2018
Fears that financial turbulence in Turkey were the first sign of broader problems rumbled markets across the emerging world in August, with South Africa one of the hardest-hit. The country has Africa’s most globally-integrated economy and most …
30th August 2018
UK Prime Minister Theresa May is using a visit to Africa to promote economic ties with the region, but we doubt that trade links between Britain and Sub-Saharan Africa will strengthen over the coming years. … UK-Africa trade ties will remain …
29th August 2018
Few details about Angola’s request for IMF aid have been released, but any deal would boost investor confidence. We revised down our rand/dollar exchange rate forecasts this week. A tweet from President Donald Trump subsequently highlighted the currency’s …
24th August 2018
The rand’s recent falls have prompted us to downgrade our end of year forecasts. We now think that the currency will slip from 14.4/$ to 15/$ by the end of 2018 and to 15.5/$ by the end of 2019. … South Africa: Revising down our rand …
22nd August 2018
July’s stronger-than-expected inflation was almost entirely due to sharp rise in fuel costs. Core inflation remained stable, and we think that the SARB will keep policy on hold this year. … South Africa CPI …
GDP figures due next week will probably show that growth in Nigeria remained weak in Q2. We think that growth was probably about 2% y/y, essentially in line with the previous two quarters. … Nigeria: Activity data suggest weak growth in …
21st August 2018
Attention this week focused on the rand, which fell after the Turkish crisis spooked investors. This distracted attention from activity data suggesting that the country’s economy stagnated in Q2. Elsewhere, confidence in Kenya was hit by a corruption …
17th August 2018
Q2 activity data were an improvement on Q1, when the economy contracted sharply. But a weak performance from key sectors has still dealt a blow to hopes that President Ramaphosa would boost growth. Indeed, it’s possible that South Africa entered a …
15th August 2018
The rand’s status as a liquid, easily traded currency makes it particularly vulnerable to shifts in EM sentiment. But these seldom last, and the SARB will not – as some expect – respond by hiking rates. … South African rand: Why always …
14th August 2018
Policymakers at the Bank of Uganda kept the policy rate unchanged at their meeting this morning and we don’t expect any rate cuts for the remainder of this year. … Uganda Interest …
13th August 2018
The falling rand has, yet again, highlighted the currency’s vulnerability to EM risk sentiment. From an economic perspective, however, the country’s situation is very different from Turkey’s building crisis. … South Africa: Turkey …
The rescue of five small failing banks in Ghana should help to improve the (fragile) health of the sector and, in time, should help to support a recovery in credit growth. Elsewhere, the resumption of debt restructuring talks in Mozambique is likely to …
10th August 2018
Growth in South Africa’s manufacturing sector slipped to 0.7% y/y in June, but today’s figures still suggest that the economy just managed to dodge another quarter of q/q contraction in Q2. … South Africa manufacturing production …
7th August 2018
A new offer to restructure Mozambique’s debt hints at the shape that an eventual deal may take. An agreement would provide a boost to confidence in an economy that is already starting to recover. … Mozambique: Debt offer suggests a deal is …
6th August 2018
While policymakers in other EMs are hiking rates, we think that African central banks will follow Kenya's recent example and continue to ease policy over the next 18 months. Fears surrounding the economic impact of South Africa's land reform process are …
3rd August 2018
President Ramaphosa’s call for constitutional change has stoked investor fears of economically-painful land reform. We think that this is overdone, but a poorly-managed process will boost market volatility. … SA: Land reform: Market moves exceed economic …
1st August 2018
The pick-up in South Africa’s manufacturing PMI for July supports our view that the economy will strengthen in the second half of this year. … South Africa & Nigeria Manufacturing PMI …
Data released in July revealed a wide-spread economic slowdown across most of Sub-Saharan Africa. The available figures mostly suggest that conditions improved more recently, but that growth remained weak in the middle of the year. … Recent weakness …
31st July 2018
The statement that accompanied today’s decision by the Central Bank of Kenya to lower interest rates by 50bp suggested that the easing cycle has further to run. However, with inflation set to rise in the coming months, the next cut in rates is likely to …
30th July 2018
The available evidence suggests that fears of a pre-election surge in Nigerian inflation are misplaced. Elsewhere, we doubt that violence will derail gas investment in Mozambique and expect that President Emmerson Mnangagwa will win next week’s election …
27th July 2018
Widespread fears that Nigeria’s upcoming election will spur inflation are not supported by the available evidence. We think that price pressures will continue to ease over the rest of this year. … Nigeria: Pre-election inflation fears …
25th July 2018
Nigeria’s MPC left its key rate on hold at 14.00%, and hawkish language has led us to remove the rate cuts that we’d previously pencilled in for Q4. Confusingly, the governor also announced unorthodox policy tools to loosen credit conditions, which will …
24th July 2018
Inflation in Nigeria slowed in June, and we think that it will continue to ease over the coming months. While policymakers will keep their key rate on hold tomorrow, they will probably cut later this year. … Nigeria Consumer Prices …
23rd July 2018
South African activity data out this week supported our view that the economy strengthened in the middle of Q2. Even so, growth will probably disappoint over 2018 as a whole. Elsewhere, Abuja’s efforts to re-launch Nigeria Air threaten to burden the …
20th July 2018
South African policymakers adopted even more hawkish language at today’s MPC meeting, but we still doubt that they will hike rates in 2019. The risks to our non-consensus view are, admittedly, growing. … SA: SARB talks tough, but rate hikes still …
19th July 2018
Kenya’s wide current account deficit will narrow in 2019 as oil prices decline and food imports fall. But the situation will remain fragile; we think that economic growth will be softer than most expect, and that the shilling will weaken against the US …
Today’s unexpectedly strong retail sales figures add to the evidence that South Africa’s economy improved in the middle of Q2. The contraction seems to have bottomed out in April. … South Africa: Retail sales suggest improvement in …
18th July 2018
June’s softer-than-expected inflation print supports our view that fears of a rate hike are misplaced. We think that the SARB will keep policy on hold this year, before cutting its key interest rate in 2019. … South Africa CPI …
Survey and output figures released this week suggested that conditions in Nigeria and South Africa improved in Q2. South African retail sales figures out next week will probably provide more evidence of a modest recovery. We think that the SARB will keep …
13th July 2018
Surprisingly positive figures from the mining and manufacturing sectors suggest that South Africa’s economy improved a bit last quarter. Even so, GDP probably continued to fall. … South Africa: Contraction eased in middle of …
12th July 2018
Economic growth in Sub-Saharan Africa will probably strengthen over the second half of 2018, but we think that the consensus view that this year’s performance will mark the start of a multi-year acceleration is overly optimistic. Although most EM central …
The latest drop in the SACCI Business Confidence Index strengthens our view that South Africa’s economy remained weak in Q2. … South Africa SACCI Business Confidence …
10th July 2018
Recently-released figures have supported our view that Kenya’s economy will strengthen this year. Conditions elsewhere, however, seem to have deteriorated. And we think that next week’s data will throw cold water on hopes that South Africa’s economy …
6th July 2018
After contracting in Q1, the latest figures suggest that South Africa’s economy remained very weak in Q2. As a result, we’ve cut our 2018 GDP estimate from 2.0% y/y to a below-consensus 1.3%. … South Africa: The Ramaphosa …
4th July 2018
The fall in South Africa’s manufacturing PMI for June provides further evidence that the slump in the economy seen in Q1 was followed by further weakness in Q2. … South Africa Manufacturing PMI …
2nd July 2018
This week’s South African employment figures were less positive than they appear at first glance. Elsewhere, official economic growth slowed in Ghana in Q1. New poverty estimates caused a storm in Nigeria, where policymaking is taking a populist turn in …
29th June 2018
After a painful adjustment, growth in the Central African franc zone will pick up in 2018 and 2019. The region’s longer-term outlook, however, is poor. Indeed, tensions between Cameroon and its more oil-dependent neighbours may eventually threaten the …
28th June 2018
Figures released over the past month confirmed that Africa’s larger economies have all struggled in 2018. South Africa, where GDP actually fell in Q1, was the worst performer. Elsewhere, figures from Nigeria, Angola, Kenya, and Côte d’Ivoire all suggest …
27th June 2018
Market fears that South African policymakers will hike interest rates in response to a weak rand are overdone. We think that the SARB’s repo rate will be held at 6.50% for the rest of this year. … S. Africa: Why the SARB will look through rand …
26th June 2018
Markets are getting ahead of themselves by pricing in rate hikes in South Africa. Policymakers have explicitly said that they will not react to currency moves until they see a lasting effect on domestic inflation, which actually eased last month. We …
22nd June 2018
After widening in Q1, South Africa’s current account deficit will likely narrow later this year. The deficit strengthens calls for a rate hike, though we maintain that the SARB will leave rates on hold in 2018. … South Africa Current Account …
21st June 2018
South African inflation eased slightly in May, which should reduce speculation that the SARB will hike rates in the coming months. We think that policymakers will keep rates on hold, before cutting in 2019. … South Africa CPI …
20th June 2018
Inflation in Uganda will accelerate over the coming months, but remain below the highs recorded last year. Policymakers will probably leave rates on hold this year, but restart their easing cycle in 2019. … Uganda: Inflation to be contained this …
18th June 2018
