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Mining production rose by a stronger-than-expected 5.2% y/y in October. This provides the first solid sign that the economy retained momentum as it entered the fourth quarter. … South Africa Mining …
7th December 2017
Long simmering political tensions within the African National Congress (ANC) will come to the boil next week when the ruling party meets for its national conference. But while the summit has cast a long shadow over South Africa this year, we think that …
6th December 2017
Growth in South Africa’s economy remained strong in Q3, suggesting that the country’s recovery is gaining traction. This supports our view that growth will surprise to the upside in 2018. … South Africa: Economy getting into …
5th December 2017
The small pick-up in South Africa’s manufacturing PMI last month, coming on the back of an improvement in October, suggests that the sector’s slump eased further in Q4. … South Africa Manufacturing …
1st December 2017
South Africa’s latest ratings downgrade wasn’t as bad as the markets had expected; the rand rallied after the country’s local currency debt was cut to junk by S&P but left as investment grade by Moody’s. Over the longer term, we doubt that the latest …
30th November 2017
November was a pretty bad month for both Nigeria and South Africa, Sub-Saharan Africa’s two largest economies. Economic growth in Nigeria remained very weak in Q3, and entirely dependent on the recent increase in oil output. Despite the government’s …
29th November 2017
Fears that bond yields could jump sharply and that the rand could sell off if Moody’s and S&P cut South Africa’s local currency debt to junk status later today look a bit overblown. Much of the bad news already appears to be priced into the market. … …
24th November 2017
The South African Reserve Bank (SARB) made it pretty clear at today’s MPC meeting, at which the policy rate was left unchanged at 6.75%, that any additional easing is off the cards. As a result, we have taken the rate cuts that we had previously expected …
23rd November 2017
The decline in South African headline inflation last month, to 4.8% y/y, and softening core price pressures may temper expectations in the market for interest rate hikes in the next few months. But with inflation set to rise this month on the back of the …
22nd November 2017
The weaker-than-expected pick-up in Nigerian GDP growth in Q3, to 1.4% y/y, was driven entirely by a rebound in oil production, while the non-oil sector weakened. We don’t think these data will affect tomorrow’s central bank interest rate decision (at …
20th November 2017
The military takeover in Zimbabwe last night has drawn attention to the escalating political crisis in the country. In this Update, we look at the economic angle and explain why the latest developments are unlikely to have a substantial impact on the rest …
15th November 2017
South African activity data for September were disappointing, but it looks like the economy expanded by a decent 2% q/q saar over Q3 as a whole. More timely figures for October suggest that the economy has since strengthened. And while events in Zimbabwe …
Last month’s Nigerian inflation reading of 15.9% y/y means that, although the central bank has signalled that it intends to cut interest rates, this is unlikely to come at next week’s meeting. We think monetary easing is more likely to begin in early …
An improved performance by several African economies – notably Nigeria – on the World Bank’s Doing Business index has resulted in some very positive headlines. But we would caution against assigning too much weight to the annual index. … Africa’s business …
10th November 2017
South African output data for September were disappointing. But a stronger performance earlier in Q3 probably kept headline growth pretty robust – by local standards – over the course of last quarter. … South Africa: Output data held up in …
9th November 2017
The first draft of Nigeria’s 2018 budget suggests that the government will – yet again – set itself a spending target that is unlikely to be met. Borrowing will remain pretty limited, but the shift towards external debt will increase exchange rate risks. …
7th November 2017
South Africa’s manufacturing PMI recovered a bit in October, but remained very low. Given that it has overstated the weakness of the economy in recent quarters, we wouldn’t read much into today’s reading. … South Africa Manufacturing …
1st November 2017
Political shocks hit markets in South Africa and Kenya in recent weeks. Markets elsewhere in Sub-Saharan Africa also performed pretty poorly over the course of October, though they remain up on the year. … South Africa budget, Kenya election jolt …
31st October 2017
Kenya’s ongoing political crisis is drawing attention to its fragile balance sheet. Our core view is that policymakers should be able to manage the situation. Even if the currency were to weaken sharply, the resulting rise in the country’s FX debt burden …
The results of yesterday’s re-run presidential election in Kenya are not in doubt. But signs suggest the country’s political crisis – which has already weighed on the economy and local markets – will drag on. … Kenya: Boycotted election threatens lasting …
27th October 2017
Today’s Medium Term Budget Policy speech confirmed that South Africa’s fiscal position has deteriorated since February. But the deficit – which is not as worrying as some seem to think – is the result, rather than the cause of South Africa’s economic …
25th October 2017
Attention this month has focused on political stories in Kenya, South Africa, and Angola. We will continue to cover these issues in other publications. While economic data released over the past month grabbed fewer headlines, we think that it provided a …
24th October 2017
Market expectations towards South African interest rates have shifted markedly in recent weeks. While a rate cut next month is no-longer likely, we think that the markets have moved too far, and are now under-estimating the chance of looser policy over …
20th October 2017
New activity data suggest that South Africa’s long-suffering economy experienced comparatively robust growth in mid-Q3. Today’s figures support our markedly above-consensus growth forecasts. … South Africa: Growth remained robust in …
18th October 2017
Nigeria’s budget deficit is, perhaps surprisingly, smaller than the government had expected. But this comes at a significant economic cost. And even the country’s small shortfall may prove hard to fund. … Nigeria: Deficit within target, but finances …
17th October 2017
Kenya’s post-election legal drama is still rapidly developing. But the latest developments all suggest that the country’s chance of avoiding a violent (and economically painful) crisis is dwindling. … Kenya: Risk of violent crisis …
13th October 2017
After bouncing back in Q2, the latest activity data suggest that South Africa’s economy remained strong in mid-Q3. This supports our above-consensus growth forecasts for the country. … South Africa: Economy remained strong in …
12th October 2017
Sceptics are right to question the reliability of official economic statistics in Africa, but the problems unevenly distributed across the region. For Africa’s larger economies, we think that the official data provide a reasonably accurate (if frequently …
We expect that economic growth in Sub-Saharan Africa will continue to accelerate in 2018. This recovery will be driven largely by faster growth in the region’s three biggest economies – Nigeria, South Africa, and Angola – all of which have suffered …
10th October 2017
A combination of rising political risk and falling commodity prices caused key African markets to weaken over the past month. Only a few markets bucked the trend, and they gained very little ground. … African markets soften in …
28th September 2017
GDP figures released this month showed that the economic fortunes of Africa’s largest economies diverged in Q2. South Africa’s economy rebounded after a brief recession at the turn of the year. While investment spending remained weak, strength elsewhere …
27th September 2017
Nigerian policymakers kept rates on hold today, but the accompanying statement made it clear that easing is on the way. We expect that the first cut will come in Q1 2018. … Nigeria: Rates on hold, but cuts are still on the …
26th September 2017
The South African Reserve Bank has paused its loosening cycle, but we expect that it will cut rates at its November meeting, by which time inflation will have eased further. … South African loosening cycle put on …
21st September 2017
Inflation in South Africa was weaker than expected in August, which supports our view that the South African Reserve Bank will cut its key policy rate from 6.75% to 6.50% at its meeting tomorrow. … South Africa CPI …
20th September 2017
The Kenyan MPC kept rates unchanged today, but we expect that they will loosen policy next year as inflation falls towards the middle of the target range. … Kenyan MPC holds rates again, but will ease in …
18th September 2017
Nigerian inflation remained high in August, but we expect that it will ease over the coming months, prompting policymakers to cut interest rates. … Nigeria Consumer Prices …
15th September 2017
South Africa’s current account deficit was wider than expected in Q2, at 2.4% of GDP, but the big picture is that it has narrowed significantly over the past 18 months. The slightly wider shortfall is unlikely to prevent the Reserve Bank from cutting …
14th September 2017
July activity data suggest that South Africa’s economy weakened at the start of Q3. But GDP still grew by about 1.5% q/q saar at the start of Q3, supporting our above-consensus growth forecasts. … South Africa: Growth slips at start of …
13th September 2017
Most commentators hailed the Kenyan Supreme Court’s decision to annul the result of last month’s presidential election as a key win for the country’s democracy. This is, as yet, premature. The real test of the country’s institutions is still to come. … …
12th September 2017
South African mining data for July were weaker than expected but, taken together with the manufacturing figures also released today, it looks like the economy may have strengthened a little at the start of Q3. Moreover, the data confirm our suspicions …
7th September 2017
Africa’s two largest economies returned to growth in Q2. But while South African growth rebounded, things in Nigeria remained very weak, causing us to downgrade our 2017 growth forecast to 1.2%. … Q2 GDP: South Africa rebounds, Nigeria limps out of …
5th September 2017
GDP figures due out Tuesday will probably show that the Nigerian & South African economies returned to growth in Q2. Indeed, we think that both countries will perform better than most expect this year. … Nigeria & South Africa: Key economies bounced back …
4th September 2017
South Africa’s manufacturing PMI remained extremely weak last month. And while the survey has tended to overstate downturns in recent years, it may suggest that the economy softened in Q3. … South Africa Manufacturing PMI …
1st September 2017
August was another strong month for African markets as key equity indices gained. Fears that politics would knock markets off course proved ill-founded. … African markets continue to pick …
30th August 2017
Angola’s new president inherits an economy that will perform worse than most expect in 2017. High levels of FX debt and shaky government finances raise the significant risk of a painful debt crisis. … Angola: New president, same …
25th August 2017
Attention this month focused on unfolding political dramas in Africa’s key economies. The president of South Africa narrowly saw off another no-confidence vote, Kenya’s president was re-elected in a vote that the opposition claim was rigged, and Nigeria’s …
24th August 2017
South African inflation eased by more than we’d expected in July, raising the prospect of two 25bp cuts later this year, rather than the single cut we currently expect. … South Africa CPI …
23rd August 2017
A new survey of corruption in Nigeria’s public service underlines the economic costs of its onerous FX and customs regime. The publication of the commendable frank survey is, in itself, a very positive sign. … Nigeria: New survey quantifies cost of …
18th August 2017
South African retail sales figures released earlier today support our view that the country’s economy returned to growth in Q2. We expect that growth will surprise to the upside over 2017 as a whole. … South Africa: Retail sales point to stronger …
16th August 2017
The Nigerian authorities’ decision to allow commercial banks to quote a floating exchange rate, rather than the less-frequently used official rate has been interpreted by some as a move towards a unified exchange rate. However, while several of the …
11th August 2017
