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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
The rise of capital inflows into Nigeria in Q3 suggests that the worst of the problems in the country’s balance of payments are over. But significant strains remain. … Nigeria: Capital inflow figures cause for muted …
7th November 2016
The Nigerian senate’s decision to block the president’s borrowing plans may preclude an infrastructure-focused stimulus plan. The bill’s failure highlights the importance of boosting domestic non-oil revenue. … Nigeria: Failed debt plan another blow to …
2nd November 2016
South Africa’s manufacturing PMI fell dramatically last month. The sharp fall in the measure of future conditions suggests that hopes of a swift improvement in the country’s economic and political situation are fading. … South Africa Manufacturing PMI …
1st November 2016
News that Mozambique is seeking to restructure its debts sent its US$ bond yields soaring. South African markets shrugged off another attempt to depose the respected finance minister. … Mozambique: Debt revelations push up bond …
28th October 2016
Political developments across Africa have raised risk perceptions in several key economies. Allies of South Africa’s president made yet another attempt to force the resignation of Pravin Gordhan, the country’s respected finance minister. A broad coalition …
27th October 2016
Finance Minister Pravin Gordhan’s budget plans rely on an economic acceleration that we believe is unlikely to materialise. If growth stays weak, South Africa will over-shoot its deficit and debt targets. … South Africa: Fiscal goals still too …
26th October 2016
It seems likely that Mozambique will eventually reach a debt restructuring deal with its creditors. But the revelation of yet more hidden debt (or another currency fall) could result in a messier outcome. … Mozambique: What to make of the latest debt …
Concerns about the health of Nigerian banks have risen over the past month. Indeed, as we explain in this Watch, it now looks increasingly likely that parts of the financial sector will require recapitalisation. That said, the risk of a widespread crisis …
20th October 2016
August output data suggests that South Africa’s economy did not sustain the rapid growth posted in Q2 into Q3. We expect that growth will be very weak over the remainder of 2016 and into 2017. … South Africa: Economy falters in …
19th October 2016
September's slightly weaker-than-expected inflation figure supports our view that the SARB will hold its key policy rate unchanged at 7.00% over the coming quarters rather than hiking rates. … South Africa Consumer Prices …
While above very muted expectations, manufacturing output data for August suggest that economic growth slowed in Q3. … South Africa Manufacturing Output …
11th October 2016
The government’s decision to establish a state of emergency could worsen Ethiopia’s rolling political crisis. The deteriorating situation risks knocking the country off its current growth trajectory. … Ethiopia: Political crisis rocks African growth …
10th October 2016
South Africa’s manufacturing PMI rebounded in September, but remained relatively weak. The indicator has been unreliable lately, but the tepid result supports our view that the economic acceleration seen in Q2 was not sustained in Q3. … South Africa …
3rd October 2016
The widening gap between Nigerian’s official and parallel exchange rates highlights the CBN’s continuing influence over the official FX market. We expect that the official rate will be devalued by another 15% by the end of 2016. … Nigeria: Naira crashes …
30th September 2016
After contracting sharply in Q1, South Africa’s economy has bounced back faster than many – including ourselves – had suspected. Growth will probably pick up a bit next year, but we suspect that South Africa’s economy will remain very weak over the medium …
29th September 2016
The latest GDP figures all support our view that economic growth in Sub-Saharan Africa as a whole will be even worse in 2016 than it was in 2015, when it hit a 16-year low. The key question now is whether the slump is near its low point. The data released …
28th September 2016
Today’s statement from the South African Monetary Policy Committee suggests that rates in the country are no longer likely to be hiked later this year. … South Africa: MPC Statement hints tightening cycle …
22nd September 2016
August’s within-target inflation reading of 5.9% y/y makes it all but certain that the Reserve Bank will hold its key interest rate at 7.00% at its meeting tomorrow. … South Africa Consumer Prices …
21st September 2016
The MPC’s decision to hold rates at 14.00%, thus rebuffing government calls for looser interest rates is an encouraging sign of the bank’s independence. We expect that rates will have to rise later this year. Elsewhere, Kenyan rates were cut from 10.50% …
20th September 2016
Activity data for July and August suggest that the economic situation in Nigeria deteriorated going into the third quarter. The economy will probably continue to contract over the duration of 2016. … Nigeria: Early signs point to deepening contraction in …
15th September 2016
Output figures for July suggest that South Africa’s economy weakened a bit at the beginning of Q3. This supports our view that strong growth in Q2 was a brief rebound, not the beginning of a lasting pickup. … South African economy losing steam in …
14th September 2016
South Africa’s current account position improved by more than we’d expected in Q2, but the shortfall will still probably remain relatively wide over the coming year. … S. Africa Current Account …
13th September 2016
The successful launch of Ghana’s fifth Eurobond is a sign of the markets’ growing confidence in the country. While the economy remains fragile, we expect that the worst is now behind us. … Ghana: Eurobond provides boost to confidence in fragile …
12th September 2016
The first Q3 South African output data support our view that the rapid growth reported in Q2 is unlikely to be sustained. The economy may post positive growth in 2016 as a whole, but only marginally. … South Africa: Output falters at start of …
8th September 2016
Strong q/q growth in Q2 mostly reflects a bounce back following the disaster of Q1. We expect that growth will be sluggish in the second half of the year. … South Africa GDP …
6th September 2016
The sharp decline in South Africa’s manufacturing PMI looks worrying. But we wouldn’t panic; the survey has become a less reliable leading indicator recently. … South Africa Manufacturing PMI …
1st September 2016
The contraction of Nigerian GDP in Q2 was driven by a sharp fall in oil output, but the data shows that other sectors of the economy are also suffering. Economy policy has made a bad situation worse. … Nigeria: Economy plunges into broad-based …
31st August 2016
Official data released over the past month mostly suggested that African economies improved a touch, but a series of political shocks has hit investor confidence. The most high-profile of these as been the latest dispute between South African President …
30th August 2016
