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Rates on hold, SARB to keep a close eye on election results The South African Reserve Bank’s decision to leave the repo rate unchanged at 8.25% was never in doubt. Governor Kganyago said as little about the election as was possible, but the MPC will be …
30th May 2024
Early signs point to low ANC vote, rand on the backfoot The early results from South Africa’s election which took place yesterday point to the ruling ANC securing a vote share closer to the low end of projections (at just over 40%), increasing the chances …
Africa Chart Pack (May. 2024) …
28th May 2024
South Africa's pivotal election looms There’s less than a week to go until South Africa’s pivotal election and there remains significant uncertainty about the ANC’s vote share and, if it’s forced to go into coalition, who it will ally with. The ANC’s vote …
24th May 2024
Growth slowdown begins Nigeria’s GDP growth slowed to 3.0% y/y in Q1, driven by a halving in the oil sector growth rate, alongside high inflation and tighter monetary conditions continuing to drag on the non-oil economy. We expect growth to remain …
South Africa’s upcoming election looks set to herald a new era of coalition government. There are lots of permutations ranging from a centrist ANC-DA coalition to a so-called ‘doomsday coalition’ in which the ANC teams up with the left-wing EFF (although …
23rd May 2024
Inflation eases, but rate cuts still some way off South Africa’s headline inflation rate eased further to 5.2% y/y in April but the Reserve Bank will want to see more evidence that inflation and, crucially, inflation expectations are coming under control …
22nd May 2024
Another large hike, MPC feels it is winning inflation battle The Central Bank of Nigeria delivered a larger-than-expected 150bp hike to its policy rate, to 26.25%, at its meeting today, reinforcing Governor Cardoso’s recent comments that officials will …
21st May 2024
SA: NHI bill signals looser policy post-election South Africa’s President Ramaphosa approval of the controversial National Health Insurance (NHI) bill this week was a clear effort to bolster the ANC’s support ahead of the election. But it also signals …
17th May 2024
Despite the rand’s recent outperformance, we think risks around the upcoming election in South Africa, among other factors, will cause renewed weakness in the currency before long. Since US Treasury yields peaked in late April – falling further after the …
16th May 2024
This interactive dashboard allows you to explore all of our forecasts and key data for economies in Sub-Saharan Africa. If you have subscriber access to the data underlying this redesigned dashboard, you can download it via the menu options in the top …
This note answers some of the most frequently asked questions that we received from clients during a recent online briefing about the latest US tariffs on China. Watch the original briefing here . What has been announced? Yesterday was the end of a …
15th May 2024
The latest hard activity data suggest that South Africa’s economy contracted in the first quarter of 2024 and, regardless of the outcome of the upcoming election, this ongoing weakness will put pressure on the next government to revive growth, including …
A key concern around South Africa’s upcoming election is that the left-wing Economic Freedom Fighters (EFF) could get into government as part of what’s being dubbed in some quarters as a “doomsday coalition” with the ANC. This Focus takes a closer look at …
14th May 2024
SA: coalition fears grab the headlines Electioneering in South Africa heated up this week as parties openly warned of the different scenarios that could come after this month’s polls. The scenario that is most worrying remains a left-wing coalition. The …
10th May 2024
The South African government has turned to fiscal austerity in an effort to stabilise the public debt ratio and to keep investors on board, but this is likely to become harder to do post-election. While a lot depends on the form of coalition government …
9th May 2024
SA’s growth pick-up coming too late for the ANC This week, South Africa manufacturing PMI release reinforced our view that an easing drag from electricity outages will support a pick-up in growth over the coming quarters. But stronger growth is coming …
3rd May 2024
While Chinese lending to Africa has fallen sharply from its peak last decade, China will remain a big player in the region’s external financing – particularly if some of the foreign exchange generated by China’s enormous trade surplus is recycled in …
2nd May 2024
PMI bounces as electricity supply improves South Africa’s manufacturing PMI jumped in April, adding to signs the economy is finally moving on from stagnation as the electricity situation improves. And with price pressures still elevated, the SARB looks …
All the signs suggest that a second Trump administration would take a more protectionist approach to trade. Export demand in Mexico, East Asia and ASEAN would be particularly hard hit by a universal US import tariff or a dollar devaluation, and those …
29th April 2024
SARB hawkishness continues, no rate cuts in 2024 This week, the SARB published is biannual Monetary Policy Review , which showed a Bank less confident about South Africa’s disinflation trend and reiterated a desire to move to a lower inflation target. …
26th April 2024
Africa Chart Pack (Apr. 2024) …
25th April 2024
The policy shifts underway in Turkey, Nigeria, Argentina and Egypt have ticked a lot of the right boxes so far, but it will take years for the full economic benefits to materialise and require policymakers to remain committed to reforms. We’re most …
24th April 2024
The Central Bank of Nigeria’s (CBN) monetary policy reforms have injected a welcome dose of momentum back into the country’s policy shift. But the minutes to the latest MPC meetings also suggest that a slowdown in growth could prompt a (premature) shift …
South Africa’s upcoming general election looks likely to result in a much more fragmented parliament and mark a shift to coalition government. The lesson from elsewhere in the emerging world is that this can often lead to a worsening fiscal position. …
23rd April 2024
Will the naira’s rebound last? The sharp recovery in the naira in recent weeks has been somewhat of a surprise and it has come at the expense of a steep decline in FX reserves. Without substantial improvements in the current account position or capital …
19th April 2024
South Africa’s latest hard activity data provided some encouraging signs that the economy may be turning the corner even if it comes too late to help the ANC’s hopes of keeping its majority in parliament after May’s election. With electricity outages …
17th April 2024
This page has been updated with additional analysis since first publication. Inflation fall will not sway the SARB into interest rate cuts The larger-than-expected fall in South Africa’s headline inflation rate, to 5.3% y/y, in March will not be enough to …
Further jump in inflation means tightening cycle likely to continue Nigeria recorded another acceleration in headline inflation to 33.2% y/y in March as the previous falls in the naira have continued to push up prices. And while the naira has staged a …
15th April 2024
Spectre of former President Zuma worries ANC The big news in South Africa this week was a court decision allowing former president Zuma to stand in the May elections, which has added another level of uncertainty to the vote. Opinion polls suggest that his …
12th April 2024
Nigeria’s authorities have ceased central bank deficit monetisation via the ways and means facility. But the government will struggle to finance its ambitious spending plans – particularly given the challenges of raising revenues. We suspect that the …
11th April 2024
Uganda’s strong recent economic recovery is facing domestic and external headwinds, including international condemnation of the government’s Anti-Homosexuality Bill – and the associated impact on financing and trade – and upcoming EU deforestation …
8th April 2024
SA’s weak demand is holding back its recovery South Africa’s March PMI numbers were disappointing and support our view that, while the drags from loadshedding and austerity are easing, the recovery this year will be subdued. The ABSA/BER manufacturing …
5th April 2024
El Ni ño is causing severe drought across much of southern Africa, which is likely to weigh on GDP, push up inflation and strain balance sheets. South Africa has also suffered water shortages, albeit more as a result of creaking infrastructure than low …
4th April 2024
Zambia moves closer to full debt restructuring deal Zambia secured an debt restructuring deal with private bondholders this week. It looks like it has the seal of approval from official creditors, paving the way for the country to finally exit default. …
28th March 2024
Africa Chart Pack (Mar. 2024) …
Overview – Sub-Saharan Africa will record a pick-up in growth over the coming years, helped by an improving external environment reducing the threat of further large currency falls as well as sovereign defaults. Monetary and fiscal policy will generally …
27th March 2024
The South African Reserve Bank left its repo rate unchanged at 8.25% for a fifth consecutive meeting today and the continued hawkish rhetoric from Governor Kganyago supports our view that rate cuts will only happen after May’s election. Even then, a …
The Central Bank of Nigeria continued its hiking cycle today, raising rates by 200bp to 24.75%, providing further evidence that officials are fighting aggressively to tackle the inflation problem and restore its damaged credibility. We think that the CBN …
26th March 2024
SARB: will rate cuts ever come? The South African Reserve Bank (SARB) looks set to leave interest rates on hold at 8.25% next week and it now seems an easing cycle won’t begin until after May’s election, the outcome of which could even persuade the SARB …
22nd March 2024
Sub-Saharan Africa’s enormous demographic tailwind means the region will see the fastest GDP growth rates (4-5%) of any region between now and 2050. By the middle of the century, the region’s overall GDP will probably be larger than any single economy bar …
21st March 2024
We hosted an online briefing to discuss EM financial risks in more detail. Watch the recording here . Our risk indicators are presented as an interactive EM dashboard on our website here . The past few years have sharpened investors’ focus on assessing …
20th March 2024
South Africa’s latest hard activity data show that the economy continued to struggle at the start of 2024, which will hardly help the ANC’s hopes of keeping its majority in parliament after May’s election. That said, we still think that easing electricity …
Jump in inflation to delay start of interest rate cuts The larger-than-expected rise in South Africa’s headline inflation rate, to 5.6% y/y, in February means that the SARB is likely to delay the start of its easing cycle until after May’s election. …
Nigeria eyes up return to Eurobond market The Nigerian naira’s latest devaluation has taken it closer to fair value and, with investor sentiment towards Nigeria improving, the government is lining up a fresh Eurobond sale. That may help to plug the budget …
15th March 2024
Inflation hits 31%, but CBN likely to hold fire on further rate hikes Nigeria’s headline inflation accelerated to a higher-than-expected 31.7% y/y in February and the naira’s latest sharp falls mean it will continue to march towards 35% y/y over the …
The devaluation of the Nigerian naira earlier this year appears to have brought it much closer to fair value, which will help to put the balance of payments on a more stable footing. The key now is for the CBN to allow the naira to move in line with …
13th March 2024
South Africa’s struggling PGM producers Lower global metal prices are pushing South Africa’s major producers to contemplate cost-cutting which could lead to lower output and fewer jobs, adding yet another constraint to the modest pick-up in growth that we …
8th March 2024
Very modest growth in Q4, but 2024 should be better South Africa’s economy posted a measly 0.1% q/q increase in GDP in the final quarter of last year and the latest evidence points to a soft start to 2024 too. But we still think that, with the drags from …
5th March 2024
CBN delivers bold hike but inflation risks remain The Nigerian central bank’s 400bp rate hike and its reaffirmation of its inflation fighting credentials should help provide respite to the naira and inflation. But Nigeria will need to shift away from …
1st March 2024
