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February’s inflation figures offer the first sign that inflation has peaked. We expect that price growth will weaken this year, but will remain above the CBN’s target. … Nigeria Consumer Prices …
14th March 2017
The drought which hit a large part of Africa in 2015 and 2016 had a sizeable impact on economies in the South and East of the continent. Improving conditions will boost GDP growth in South Africa and Ethiopia this year, but agricultural sectors will …
10th March 2017
The looming shutdown of South Africa’s social grant system could temporarily cut consumption by about 0.4%-pts of GDP per month. Policymakers will probably be able to fudge a last-minute deal to keep the system running, but the near miss will raise …
8th March 2017
Nigeria’s Economic Growth & Recovery Plan (which was released this afternoon) provides a refreshingly honest analysis of the country’s economic problems & outlines a variety of sensible reforms. We’re sceptical, though, that Abuja will be willing or able …
7th March 2017
Figures released today confirmed that South Africa’s economy contracted again in Q4. But the underlying figures support our view that growth will pick up faster than most expect in 2017 … South Africa: Economy contracts, but worst now behind …
After a grim 2016, growth in South Africa will recover more quickly than most expect, reaching 2.0% in 2017 and 1.7% in 2018. But this would still be a woeful outcome for a country at South Africa’s income level. And we expect that growth will slow …
3rd March 2017
South Africa’s manufacturing PMI is the latest indicator to suggest that the economy improved at the start of 2017. We expect that growth will accelerate this year. … South Africa Manufacturing PMI …
1st March 2017
Nigeria’s economy contracted by just 1.3% in Q4 2016, confirming our view that the slump bottomed out in Q3. Growth will pick up in 2017, and may even be a bit stronger than most expect. he National Bureau of Statistics reports that the contraction of …
28th February 2017
The introduction of another official FX rate in Nigeria is not (as many seem to suspect) the prelude to abolishing FX controls. Over the longer term, however, we still expect that a weakening of the overvalued currency is inevitable. Nigerian policymakers …
23rd February 2017
South Africa’s budget for the 2017/18 fiscal year, which envisages a fiscal squeeze of around 0.5% of GDP, looks a bit more plausible than previous budget projections. But it now seems that domestic politics rather than the fiscal targets will be key to …
22nd February 2017
New official economic data have revealed that the economies of Angola and Ghana are in much worse shape than we had previously believed. The revisions should draw attention to the weak statistical capacity of many African states, which raise the risk of …
21st February 2017
Revised official GDP figures show that Angola’s economic slump is even worse than we’d thought. The revisions add to our concerns about the sustainability of the country’s large debt burden. Angola’s statistics agency could hardly have drawn less …
16th February 2017
December’s retail sales figures were weaker than expected, but tepid growth in the sector was still probably enough to prevent the South African economy from contracting in Q4. … South Africa: Economy stagnated in …
15th February 2017
The sharper-than-expected decline in South African inflation – particularly core inflation – last month supports our view that the country’s monetary tightening cycle is now over. … South Africa Consumer Prices …
Nigeria’s successful Eurobond issue late last week provided another sign that the economy is over the worst of the recent downturn. Hopes for a quick recovery, however, are likely to be disappointed. … Nigeria over the worst, but recovery will be …
13th February 2017
The sharper-than-expected 2.0% y/y fall in South African manufacturing production in December appears to be related primarily to working day effects. The underlying trend appears to be one of very slow improvement at the end of last year. … South Africa …
9th February 2017
The jump in South African retail sales in November has raised hopes in some quarters that consumer spending could be on the brink of a recovery. However, as we explain in this Watch, there are strong reasons to think that household consumption will expand …
8th February 2017
The significant improvement of South Africa’s manufacturing PMI is a rare positive surprise. But given the measure’s mixed performance in recent months, we will wait for more data before seriously questioning our below-consensus views. … South Africa …
1st February 2017
Data published over the past month provided further evidence that economic growth in the region was very sluggish towards the end of last year. Q3 GDP figures did, admittedly, show that growth picked up a bit in Ghana and Botswana. But growth slowed in …
26th January 2017
The hawkish statement by the South African MPC today is likely to focus attention in the markets on the possibility of rate hikes over the coming months. However, while inflation will remain well above target over Q1, this should be temporary and we think …
24th January 2017
Mozambique’s missed bond payment this week grabbed the headlines, but the market reaction was muted. Meanwhile, rising commodity prices have supported strong gains in South Africa’s currency and equity market. Mozambique’s slow-rolling debt crisis made …
20th January 2017
Higher fuel prices will keep South Africa’s headline inflation rate above the Reserve Bank’s target range over the first quarter of this year, but slowing food inflation will bring it back within target by Q2. Overall, we expect inflation to average 5.5% …
19th January 2017
South Africa’s surprisingly strong retail sales figures for November provided a rare piece of good news, but the economy remains extremely weak. And there’s still a significant chance that GDP contracted in the final quarter of last year. … South Africa: …
18th January 2017
Last week’s abortive army mutiny has focused attention on the political fragility of Côte d’Ivoire, which suffered a series of political and economic crises between 1993 and 2011. But we expect that the economy will remain an outperformer. … Côte …
13th January 2017
The rebound in South African manufacturing output in November is encouraging. But we expect that this was probably a blip rather than the beginning of a lasting acceleration. Figures released today by Statistics South Africa showed that manufacturing …
12th January 2017
Nigerian policymakers seem committed to the FX policies that have strangled their country’s economy. The situation is, however, unsustainable. We expect that the currency will be devalued again in 2017. … Nigeria: Naira fix will prove unsustainable in …
21st December 2016
Ghana’s recent election is, first and foremost, a ringing political success. On the economic front, we doubt that the election will trigger a sharp change in policy. But given that Ghana’s economy was already set for a turnaround, President-elect Nana …
16th December 2016
The latest figures from across Africa suggest that most economies in the region continued to perform poorly at the end of 2016. Activity data from South Africa suggest that the region’s most industrialised economy shifted into reverse at the start of Q4. …
15th December 2016
President Muhammadu Buhari’s latest budget proposal is overly ambitious; we expect that both spending and revenue will disappoint. While Mr. Buhari presented his spending plan as way of lifting the economy out of recession, he continues to cling to his …
14th December 2016
October output data suggest that, after a very weak Q3, South Africa’s economy may have contracted outright at the start of Q4. Figures released today show that retail sales fell by 0.2% y/y in October. The median forecast of the analysts polled by …
South Africa’s current account position deteriorated again in Q3. The wide deficit is the key reason why we expect that the rand will remain under pressure in 2017. … S. Africa Current Account …
9th December 2016
October’s mining and manufacturing data were both worse than even the most pessimistic analysts had expected. This suggests that, after a very weak Q3, the economy may have slowed even further in Q4. … South Africa: Economy headed for a brutal end to the …
8th December 2016
We expect that economic growth in Africa will pick up a bit in 2017 after a disastrous result in 2016. But the region’s recovery will be very weak, largely because of the poor performance of Nigeria, South Africa, and Angola (which collectively make up …
7th December 2016
South African Q3 GDP data showed that the economy slowed by even more than most had anticipated. While the Reserve Bank has sounded a little more hawkish over the past month, today’s weak data support our view that interest rates will be left unchanged …
6th December 2016
The improvement of South Africa’s manufacturing PMI in November should not distract from the fact that the measure still points to a very poor performance. All of the early data suggests that the economy remained weak at the start of Q4. … South Africa …
1st December 2016
South Africa’s trade balance improved in October, but this was driven largely by a fall in imports. This may be an early sign that domestic demand weakened. … South Africa Trade Balance …
30th November 2016
The surprise acceleration of inflation in Kenya and Uganda raises a risk to our view that both countries central banks will loosen policy. But we expect that rates will still fall. … Kenyan & Ugandan Consumer Prices …
The effect of the US election result on African currency and equity markets seems to have been fleeting. In South Africa, though, the rand has closely tracked the possibility that Jacob Zuma could be forced from office. … Trump effect limited, but Zuma …
29th November 2016
While we still expect that most African economies will pick up steam in 2017, the latest figures suggest that the region’s economic downturn has still yet to bottom out. Major economies across Africa either remained weak or deteriorated over the past few …
The Central Bank of Kenya has paused its loosening cycle for now, but further cuts are likely in 2017. We expect that the bank’s key policy rate will end 2017 at 9.00%. … Kenya: Policy loosening will proceed …
28th November 2016
Friday’s re-evaluation of South African FX debt by Fitch & Moody’s suggests the country probably will lose its investment grade status. A downgrade wouldn’t have a significant economic or financial effect. … South Africa: Downgrade, when it comes, will …
Today’s press conference saw the SARB leave rates on hold but take a notably hawkish tone.Policymakers seem to be rowing back their claim that the tighten cycle is coming to an end. … South Africa: Rates on hold, but rhetoric turns …
24th November 2016
Inflation in South Africa picked up from 6.1% y/y in September to 6.4% y/y in October, but we still expect that the SARB will keep its key policy rate on hold this week. … South Africa Consumer Prices …
23rd November 2016
Today’s MPC statement makes it very clear that the CBN is unwilling to hike interest rates in the face of inflation that is more than double the official target. The next move will probably be down. … Nigeria: CBN holds rates in face of …
22nd November 2016
The improved performance of Nigeria’s non-oil sector is a very positive sign. But with oil output likely to fall yet again in Q4, it is too early to call the bottom of Nigeria’s economic downturn. … Nigeria: Non-oil economy recovers a bit as oil woes …
21st November 2016
September’s retail sales figure was a bit stronger than expected, but activity data for Q3 as a whole suggest that South Africa’s economy may have contracted last quarter. … South Africa: Economy flatlined in …
16th November 2016
Mozambique’s worsening debt scandal has prompted fears of a string of debt crises across Africa. We believe, however, that the worst debt problems will be centred in Angola. Ghana and Zambia also look vulnerable, though things seem to be moving in the …
15th November 2016
Nigerian inflation accelerated to 18.3% y/y in October, which will put yet more pressure on the central bank to tighten monetary policy. We expect that the bank will hike its key policy rate from 14.00% to 16.00% at its meeting next week. … Nigeria …
14th November 2016
In this Watch we argue that political tensions surrounding South African President Jacob Zuma will not ease following the embattled president’s victory in yesterday’s vote of no confidence. They will, in fact, probably increase as the waning of the …
11th November 2016
South African manufacturing and mining output figures for September support our view that the strong economic growth recorded in Q2 was not sustained into the third quarter. … South Africa: Output data point to (another) sharp …
10th November 2016
