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The surprise contraction of consumer spending in Q1 was largely due to distortions caused by the growing popularity of “Black Friday” sales. We expect that spending picked up in Q2 as these faded. … South Africa: Consumer spending set to pick up in …
5th July 2017
The sharp fall in South Africa’s manufacturing PMI suggests that the sector struggled towards the end of Q2. But we would caution against reading too much into an indicator that has become increasingly volatile in recent quarters. … South Africa …
3rd July 2017
The slowdown in Kenyan GDP growth in Q1 supports our view that growth in 2017 as a whole will be weaker than most expect. … Kenya: Economic slowdown …
30th June 2017
Most African currencies weakened in June, though Nigeria’s was a key exception. The naira will probably stay pretty stable on both the official and parallel rates. … Africa: Currencies struggle, but equities remain …
29th June 2017
Revisions to the charter governing South Africa’s mining sector have been opposed by the industry and rattled the markets. In this Watch , we examine the industry’s complaints, explain the political context behind this increasingly interventionist turn in …
28th June 2017
After a very poor start to the year, most of Africa’s larger economies bounced back at the start of Q2. South African activity data suggest that the region’s most industrialised economy returned to growth in April after entering a recession in Q1. Survey …
23rd June 2017
Inflation in South Africa ticked up in May, but we still expected that inflation will ease later this year, prompting the Reserve Bank to cut its key policy rate by a total of 50bps. … South Africa CPI …
21st June 2017
South Africa’s current account deficit widened a touch in Q1, but remained small by recent standards. This will help to shield the rand from the effect of political shocks. … South Africa Current Account …
20th June 2017
We think that the easing of inflation in Nigeria, which slipped to 16.3% y/y in May, will pave the way for looser monetary policy this year. … Nigeria Consumer Prices …
15th June 2017
The first activity data from the start of Q2 suggest that South Africa’s economy recovered after the grim performance in Q1. This supports our view that growth has held up better than most expected. … South Africa: Economy bouncing back in …
14th June 2017
April’s activity data suggest that South Africa’s economy remained weak at the start of Q2. Next week’s retail sales figures will give us a clearer indication of whether crucial consumer-facing sectors picked up. … South Africa: Economy struggled at start …
8th June 2017
New data show that South Africa’s economy was already contracting before the latest political drama. While we think that things will get better later in the year, risks to our above-consensus growth view for 2017 are now clearly to the downside. … South …
6th June 2017
Kenyan inflation will remain above-target for the duration of 2017, prompting the CBK to hike its key policy rate from 10.00% to 10.50%. Elevated inflation and tighter policy will weigh on growth. … Kenya: Inflation will add to economic headwinds in …
2nd June 2017
Having fallen sharply in April, South Africa’s manufacturing PMI surged May. We don’t put much faith in this indicator, but today’s reading supports our view that the economy is holding up better than most expect in the face of difficult political news. … …
1st June 2017
South Africa’s ongoing political drama caused the rand to wobble this month, but the currency soon stabilised. Equities across the region performed well, with Nigerian stocks leading the charge. … Africa: Rand driven by politics, most markets …
31st May 2017
Events over the past month have raised questions about the positions of the presidents of Sub-Saharan Africa’s three largest economies. Nigeria’s President Muhammadu Buhari missed a key speech commemorating the two year anniversary of his own …
30th May 2017
Today’s MPC statement from the governor of the South African Reserve Bank supports our nonconsensus view that policymakers will cut their key policy rate to 6.50% by the end of the year. … South Africa: MPC strikes a dovish …
25th May 2017
The continued fall of South African inflation – which dropped to 5.3% y/y in April – supports our view that the Reserve Bank will cut its key policy rate later this year. … South Africa CPI …
24th May 2017
Nigeria’s central bank held its key rate on hold again, but we expect that policymakers will cut rates later this year as inflation slows and the economy remains weak. … Nigeria: CBN holds rates, but hints that cuts are …
23rd May 2017
Nigeria’s economy continued to contract in Q1, albeit at a slowing rate. Fading problems in the oil sector and the improvement of the non-oil sector suggest that growth will return in Q2. … Nigeria: Recession continues, but non-oil GDP picks …
Despite some fiscal loosening, we expect that Nigeria’s federal budget deficit will be just 2.5% of GDP in 2017. But this measure provides a misleading sense of the country’s fiscal health. … Nigeria: Narrow budget deficit obscures fiscal …
19th May 2017
Surprisingly strong retail sales figures support our view that the South African economy held up better in Q1 than many feared. The effect of recent political turbulence, however, will not be felt until Q2. … South Africa: Economy probably dodged …
17th May 2017
The lead-up to Kenya’s general election in August is coinciding with rising scepticism in the country about the quality of official economic figures. In this Watch , we will lay out why we are increasingly wary of Kenya’s official growth numbers – which …
16th May 2017
Mining and manufacturing figures show that both sectors unexpectedly strengthened at the end of Q1. This may cushion the impact of any hit to consumer confidence caused by recent political turbulence. … South Africa: Industrial sectors held up in …
11th May 2017
The success of Ethiopia’s fledgling manufacturing sector distinguishes the country from its African peers. But comparisons with Asia’s manufacturing-led boom are, at least as yet, premature. … Ethiopia: Talk of a manufacturing-led boom is …
8th May 2017
This week’s survey indicators provided mixed signals regarding the economic effect of political turbulence in South Africa. But they do, at least, suggest that the immediate economic hit may have been less than some had feared. … South Africa: Business …
4th May 2017
After a year of contraction, the economies of Nigeria and Angola are finally recovering. Growth will stay weak by recent standards, but will probably outpace overly-bearish consensus expectations. … Nigeria & Angola: Light at the end of the …
3rd May 2017
South Africa’s April PMI, which came in at just 44.7, provided an early sign that the sacking of Pravin Gordhan dealt a serious blow to confidence. Other business confidence figures released later this week will provide a clearer sense of the damage. … …
2nd May 2017
April was another dramatic month for African currency markets. The rand fell against the US dollar after the sacking of Finance Minister Pravin Gordhan prompted a ratings downgrade, before clawing back about half of its losses. And Nigeria’s FX system was …
28th April 2017
The relative resilience of South African financial markets in the face of the latest political turbulence has prompted us to revise our end of year rand forecast from R15/US$ to $14/US$. Markets elsewhere in Africa performed pretty well. … South Africa: …
27th April 2017
Ghana’s new government inherited an economy that was already turning the corner. After years of underperformance, growth in Ghana will accelerate sharply in 2017. … Ghana: A key African growth star in …
25th April 2017
Fears that last month’s cabinet reshuffle will knock South Africa’s economy off course have dominated the headlines. But it will be some time before we have enough information to fully quantify the impact of President Jacob Zuma’s decision to sack his …
20th April 2017
Slowing inflation in South Africa (which dipped to 6.1% y/y in March) supports our non-consensus view that the Reserve Bank will cut interest rates later this year. … South Africa CPI …
19th April 2017
Activity data suggests that South Africa’s economy had a weak start to the year. Even so, we expect that growth will gain traction later this year, and that the economy will weather the recent political storm. … South Africa: Economy …
13th April 2017
South Africa’s cabinet reshuffle probably won’t have a significant effect on fiscal policy in 2017/2018. In this Update, we highlight what to watch for as the new finance minister settles into his role. … S. African fiscal policy: What would be the first …
11th April 2017
Mounting opposition to President Jacob Zuma has sparked speculation that he could be forced from office. In this Update, we examine the mechanics of removing a South African president. … South Africa: How could Zuma …
6th April 2017
S&P’s decision to cut South Africa’s credit rating to “junk” has focused attention on the country’s current account and budget deficits. But South Africa’s balance sheet is actually in better shape than in recent years, which will limit the economic & …
5th April 2017
South Africa’s manufacturing PMI remained strong in March, pointing to faster growth in Q1. The survey will not, however, have fully captured the hit to confidence caused by the sacking of Pravin Gordhan last week, which will mostly affect Q2. … South …
3rd April 2017
President Jacob Zuma reshuffled his cabinet on 30th March, sacking Finance Minister Pravin Gordhan and replacing some of his many critics with loyalists. The removal of Mr. Gordhan – who was seen as a rare voice of fiscal discipline – caused the rand to …
31st March 2017
Yesterday’s cabinet reshuffle has hit market sentiment towards South Africa. While the move will have an immediate political impact, the negative economic effects may be less significant than some fear. … South Africa: Cabinet reshuffle rocks …
Today’s statement by the governor of the SARB suggests that policymakers will look through the current political crisis. Indeed, the tone of the statement – and the fact that one member voted for a cut – supports our view that the tightening cycle is now …
30th March 2017
In this Update, we provide several scenarios outlining how the political drama sparked by rumours that Finance Minister Pravin Gordhan will be sacked could develop, and what it means for markets. … South Africa: A guide to the latest Zuma-Gordhan …
29th March 2017
Recent reforms to Nigeria’s FX regime have further complicated an already convoluted system, which includes a variety of exchange rates. In this Watch, we provide an overview of the state of the FX system and an estimate of the effective exchange rate …
Were Pravin Gordhan to actually be removed, we think that the rand could fall by another 5% against the USD. Even if he receives another stay of execution, economic factors will cause the currency to weaken over the duration of this year. The South …
28th March 2017
The Bank of Ghana’s sharp rate cut suggests that policy loosening will be more aggressive than we’d previously thought. We’ve revised down our end of year rate forecast from 20.00% to 18.00%. The Central Bank of Kenya left rates on hold, but policy will …
27th March 2017
The falls in South African inflation last month and in the current account deficit in Q4 (data all released today) support our non-consensus view that the Reserve Bank will lower interest rates by year-end. … South Africa CPI (Feb.) & Current Account …
22nd March 2017
Today’s MPC statement suggested that policymakers are – at the very least – considering a shift towards tightening monetary conditions. The communication was, as ever, a bit unclear. We do not expect a meaningful shift in policy anytime soon. … Nigeria: …
21st March 2017
We believe that the economic cycle in Sub-Saharan Africa is turning; after slowing since 2014, growth will accelerate this year. This turnaround will be driven by both global and local factors. The big falls in commodity prices are probably behind us, …
16th March 2017
The fall in retail sales in January is disappointing given the improving picture painted by yesterday’s mining and manufacturing figures. Even so, we expect that growth will pick up later in the year as agricultural production rebounds and inflation …
15th March 2017
The latest output figures all support our view that the worst of South Africa’s economic slump is now behind us. We expect that economic growth will pick up faster than most expect in 2017. … South Africa: Output figures suggest growth picking …
14th March 2017
