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Despite the sharp rise in Nigerian inflation last month, we think it will still be some time before the headline rate peaks. This will force the central bank to tighten monetary policy even in the face of a very weak economy. … Nigeria: Rise in inflation …
18th July 2016
Activity data for May suggest that South Africa’s economy has improved after contracting in Q1. We expect that the economy returned to growth in Q2, narrowly missing a technical recession. … South Africa: Economy probably dodged recession in …
14th July 2016
Strong May manufacturing figures add to the evidence that South Africa’s economy avoided a recession in Q2. The sector seems to be benefiting from the weak rand. … South Africa Manufacturing Output …
12th July 2016
South Africa’s business confidence index remained weak in June, though it rose from the all-time low in May. Other surveys – and timely activity data – suggest that the economy probably avoided a technical recession in Q2. … South Africa Business …
6th July 2016
June’s surprisingly positive PMI reading provides another sign that South Africa’s economy narrowly avoided a recession in Q2. … South Africa Manufacturing PMI …
1st July 2016
The key decision affecting African markets this month was Nigeria’s long-awaited currency reforms, which sent the naira tumbling. The effect of Britain’s vote to leave the EU was relatively limited outside of South Africa. … Africa: Naira float, Brexit …
30th June 2016
The surprisingly bad fall in South African GDP in Q1 has raised fears that the economy could enter recession in Q2. We’ll know more in the next few weeks as May’s activity figures are published, but as things stand it’s seems more likely that the economy …
28th June 2016
We expect that African economic growth this year will fall far below even 2015’s very poor result. The weakness will be concentrated in the region’s largest economies, most of which are still adjusting to lower commodity prices. Sharp currency …
23rd June 2016
The weaker-than-expected South African inflation reading for May, of 6.1% y/y, will provide welcome relief for the Reserve Bank. Barring a surprising rise in June’s inflation figure, we think the MPC will pause the tightening cycle at next month’s …
22nd June 2016
Both the Nigerian and South African economies contracted in Q1, and the latest activity figures suggest that things remained very grim going into Q2. In Nigeria, disruptions to oil output in Q2 have dealt a heavy blow to an industry that was already …
16th June 2016
The widening of South Africa’s current account deficit in Q1 will keep pressure on the country’s currency, supporting our view that monetary policy will be tightened. Similarly, higher inflation in Nigeria will prompt rate hikes there. … S. Africa …
14th June 2016
South Africa’s April output figures suggest that, after a disastrous Q1, the economy improved a touch going into Q2. But the country will still struggle to avoid a technical recession. … South Africa: Key sectors improve at start of …
9th June 2016
South Africa’s ailing economy is clearly heading in the wrong direction. Today’s very disappointing Q1 GDP figure will add to pressure on the country’s credit rating. … South Africa: Sharp contraction very worrying …
8th June 2016
The long delay in explaining its new FX policy is another blow to the credibility of the Central Bank of Nigeria. In this note, we examine three key questions raised by the current FX policy uncertainty. … Nigeria: What to look for when CBN clarifies …
3rd June 2016
Today’s trade figures will provide some support for the South African rand. But the currency still faces significant headwinds given political uncertainty and the looming risk of a government credit ratings downgrade. … South Africa: Trade surplus …
31st May 2016
Hints of a devaluation have led to confusion over the direction of Nigerian FX policy. Political uncertainty and fears of a ratings downgrade left South African rand as the worst performing EM currency this month. … Nigeria: Naira ‘reforms’ take centre …
The situation in Nigeria has deteriorated significantly over the past month. The latest national accounts figures show that the economy contracted by 0.4% y/y in Q1, a much worse outcome than had been expected by either us or by the Bloomberg consensus. …
30th May 2016
The fall in global oil prices made an economic slowdown in Nigeria inevitable. But the country’s current crisis is largely self-inflicted. Government policy has made a bad situation much worse. … Nigeria: Analysing President Buhari’s first …
27th May 2016
The Central Bank of Nigeria finally admitted at its MPC meeting today that its inflexible “strong naira” policy has failed. The move towards a more flexible exchange rate system is a positive step. We expect that the naira will weaken to around 240/$, …
24th May 2016
The Central Bank of Kenya’s 100bp rate cut (from 11.50% to 10.50%) signals that the Bank believes that inflation is well-anchored. The wide current account deficit will limit the scope for further cuts. … Kenya: Surprise rate cut sign of reduced …
23rd May 2016
Today’s Q1 GDP figures were far worse than we had expected. It is now likely that Nigeria’s economy will contract over the year as a whole. … Nigeria GDP …
20th May 2016
Today’s decision to hold rates at 7.00% is only a pause in the SARB’s tightening cycle; we still expect at least two rate hikes later this year. The MPC statement supported our very downbeat view of South Africa’s economy. … South Africa: A pause in the …
19th May 2016
Lower-than-expected inflation and retail sales will probably lead the SARB to leave rates on hold at its meeting tomorrow. Output data suggest that South Africa narrowly avoided a fall in GDP in Q1. … South Africa: Weak economy will prompt SARB …
18th May 2016
The sharp fall in Nigeria’s oil production could, if sustained, shave more than 1%-pt off GDP growth this year. Lower oil output will also add to the country’s fiscal and current account problems. … Nigeria: Oil disruptions add to economic …
16th May 2016
The vice president’s comments regarding a possible change to Nigeria’s currency regime suggest that policy elites may not be as opposed to a devaluation as many believe. Claims that Nigeria’s fuel subsidies have been abolished are exaggerated, but price …
12th May 2016
Declining output from the manufacturing and mining sectors underscore the weakness of South Africa’s economy. Given today’s grim figures – and the recent jump in unemployment – we expect that the SARB will postpone its next 25bp interest rate hike from …
GDP growth in Sub-Saharan Africa slowed to a 16-year low in 2015, but the adjustment to low commodity prices is far from over. We expect even weaker growth in 2016. … Africa: Economic shock not over …
10th May 2016
The rise of unemployment to a 12-year high is another grim milestone for South Africa. And with municipal elections coming up in August, today’s data may embolden populist figures hoping to capitalise on the ruling party’s recent missteps. … South …
9th May 2016
Kenya’s high public debt should stabilise as a share of GDP if – as we expect – growth stays strong. But a sharp slowdown or a run on the currency could easily put the debt ratio on an unsustainbale path. … Kenya: Rising debt adds to economic …
6th May 2016
The flow of foreign capital into Nigeria has slowed to a trickle. This will exacerbate the country’s serious balance of payment problems and further depress investment in an economy that is starved of capital. … Nigeria: Collapse of capital inflows a …
5th May 2016
While inflation is picking up in most of Africa, April’s CPI data showed that price pressures are weakening in Kenya. We expect that this will allow the Central Bank of Kenya to cut rates by 50bp later this year. … Kenya Consumer Prices …
29th April 2016
The performance of African markets was mixed this month. Currencies in most major economies strengthened, but Mozambique’s ongoing debt scandal has caused US dollar debt yields there to jump. … Africa: Currencies gain, but Mozambique …
Events this month have underlined the continuing importance of the IMF for many economies across Africa. On 6 th April the government of Angola requested an IMF bailout to help stabilise an economy that has been battered by low oil prices. This marks a …
28th April 2016
Inflation eased a touch in March, but we still expect that it will rise over the duration of 2016. The current pause was mainly the result of strengthening rand. … South Africa Consumer Prices …
20th April 2016
Today’s mining figures are a sobering reminder of the weakness of one of South Africa’s key industries. Our GDP tracker suggests that growth remained positive, albeit very weak, in Q1. … South Africa: Mining figures suggest weak Q1 GDP …
14th April 2016
Media reports have overstated importance of the deals signed this week between Nigeria and China. The announced deals provide little support for Nigeria’s ailing economy. … Nigeria: Buhari’s Beijing deal …
13th April 2016
Kenya’s banking sector is stronger and more resilient than recent headlines might imply. The failure of a few small banks poses little risk to the sector as a whole. Indeed, as we explain in this Watch , the failure of a few smaller banks will probably …
12th April 2016
The sharp acceleration of Nigerian inflation is yet another sign that the country’s controversial currency and price control policies have failed. We expect that inflation will continue rising, reaching 15% y/y by the end of the year. … Nigeria Consumer …
Today’s strong output figure is a rare sign of life from South Africa’s moribund manufacturing sector. Even so, we expect that the sector will struggle to sustain much growth this year. … South Africa: Manufacturing sector springs to life, for …
7th April 2016
Government efforts to end Nigeria’s fuel shortage offer a temporary reprieve rather than a lasting solution. Without structural reforms, the economy will continue to be battered by recurrent crises. … Nigeria: Fuel crisis another blow to struggling …
6th April 2016
Today’s vote to impeach President Jacob Zuma will almost certainly fail. But efforts to oust the president will continue, potentially distracting political attention from South Africa’s dire economic situation. … South Africa: The Zuma saga is far …
5th April 2016
The Bank of Uganda is unlikely to follow today’s surprise rate cut with much more monetary easing this year. A variety of factors will force the Bank to keep policy tight. … Uganda: Bank seizes fleeting opportunity for rate …
4th April 2016
The unexpected improvement in South Africa’s PMI is very welcome news for the struggling economy. But we would caution against reading too much into an indicator with a mixed record of predicting real performance. … South Africa Manufacturing PMI …
1st April 2016
South Africa’s surprisingly narrow February trade deficit is a rare piece of positive news about the country’s economy. Elsewhere, inflation eased in Kenya and Zambia. … South Africa Trade Balance …
31st March 2016
The South African rand appreciated sharply this month, solidifying the gains it has made since the turn of the year. Other African financial markets also preformed relatively well. … Rand finally …
The biggest policy change over the past month came from Nigeria, where the Central Bank unexpectedly hiked its key interest rate from 11.00% to 12.00%. This move partially reversed the Bank’s rate cut last year, and may signal a return to more orthodox …
30th March 2016
Growth in Sub-Saharan Africa fell to a 16 year-low last year, and we believe that growth will weaken even further 2016. Three key factors will drive this decline. First, a combination of drought, declining mine output, and a widening political scandal …
24th March 2016
Nigerian officials unexpectedly abandoned two key economic policies yesterday by tightening monetary policy and re-instating a partial ban on rice imports. The immediate economic effects will be mixed, but investors may see the decisions as another sign …
23rd March 2016
Today’s surprisingly high South African inflation figure will probably lead the SARB to accelerate its programme of rate hikes. This will be very painful for an economy that is struggling to avoid recession. … South Africa Consumer Prices …
The Central Bank of Nigeria hiking its key policy rate from 11.00% to 12.00% is, in many ways, a positive sign. But this flip-flop on rates will raise yet more questions about the unpredictable and confusing direction of Nigerian monetary policy. … …
22nd March 2016
