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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
Hopes that African economies will repeat the economic miracles seen in Asia are, for the most part, misplaced. Rapid population growth will deliver reasonable rates of headline GDP growth, but improvements in per capita income will remain disappointing by …
Today’s statements from the Ghanaian and Kenyan Central Banks were more dovish than we had anticipated. This supports our view that the Ghanaian authorities will cut rates later this year, and we have now pencilled in a 50bp cut in Kenya. … Kenya & …
21st March 2016
Today’s interest rate hike in South Africa will be followed with further tightening later this year in response to the deteriorating inflation outlook. … South Africa: Inflation, rand weakness force painful …
17th March 2016
The drop in retail sales growth is the latest figure that suggests that the South African economy lost momentum in January. We expect that GDP growth will be a below-consensus 0.5%. … South Africa Retail Sales …
16th March 2016
Nigerian inflation rose to 11.6% y/y in February, largely due to the falling parallel market exchange rate. This will deal yet another blow to the controversial FX system. … Nigeria Consumer Prices …
15th March 2016
South Africa’s economy narrowly avoided an economic contraction Q4 2015, but the January output figures suggest that GDP may fall this quarter. … South Africa Manufacturing & Mining Output …
10th March 2016
The latest Nigerian GDP figures support our view that growth in Africa’s largest economy will be much weaker than most expect. While Nigeria has been battered by low oil prices, the country’s bungled policy response has made the situation much worse. … …
8th March 2016
The larger-than-expected South African current account deficit in Q4 of last year highlights the country’s external vulnerabilities and means the rand is likely to remain under pressure. Coming alongside above-target inflation, this adds to the reasons to …
South Africa’s disappointing 2016 budget published last month has reinforced concerns about the prospect of a ratings downgrade to junk status. This would clearly be damaging to the government’s policymaking credibility but, as we explain in this Watch , …
2nd March 2016
Weaker-than-expected Q4 GDP data from South Africa underline the economy’s sluggish growth prospects. At the margin, we suspect that these data make it less likely that the Reserve Bank will follow up January’s 50bp interest rate hike with another rate …
1st March 2016
The main reason why South Africa has not followed Brazil into a deep recession is that the shock to its terms of trade has been less extreme. Our core view is that South Africa faces an extended period of very low growth or stagnation, rather than a …
29th February 2016
South Africa’s 2016 budget was a damp squib and is likely to dent the government’s recent efforts to regain economic policymaking credibility. While the budget is now based on more realistic growth forecasts, the revenue-raising measures announced today …
24th February 2016
The strains in Nigeria's balance of payments are growing, threatening to push Sub-Saharan Africa's largest economy into a full-blown crisis. The Nigerian economy has been battered by the falling price of oil, which has slashed government revenue and …
23rd February 2016
Strains in Nigeria’s balance of payments sent the country’s currency tumbling this month, at least on the parallel market, and we think the central bank will eventually have to devalue the official exchange rate. In contrast, the South African rand has …
19th February 2016
South African retail sales figures for December, which showed another surprisingly strong year-on-year rise in purchases, suggest that the economy narrowly avoided a fall in GDP at the end of last year. Nonetheless, the growth outlook for this year is …
17th February 2016
South African inflation accelerated to 6.2% y/y in January in what we believe is the beginning of a food price-driven inflationary spike. Elevated inflation will add to dilemma facing the SARB. … South Africa Consumer Prices …
Nigeria’s currency has come under increasing pressure since the start of the year, and in this Watch we explain why the government’s response is unsustainable and why we think a devaluation of the official exchange rate is inevitable. … Nigeria: …
16th February 2016
The better-than-expected South African manufacturing and mining data for December provided a rare piece of good news for the economy, but even so it looks like GDP growth over Q4 as a whole probably weakened. And the early signs point towards a further …
11th February 2016
A legal case against President Jacob Zuma may further destabilise South Africa’s already febrile political situation. Increased political risk poses a very real threat to the country’s struggling economy. … South Africa: Political risk adds to economic …
10th February 2016
The latest data and surveys from South Africa have been even worse than we had expected, and we have downgraded our 2016 growth forecast to a below-consensus 0.5%. A prolonged period of slow growth will enflame tensions in the sharply divided country, …
4th February 2016
A reported US$3.5bn loan from the World Bank and AfDB would only cover about 15% of Nigeria’s gross external financing requirement. In any case, a loan would come with politically difficult conditions, so we doubt that a deal will be made over the short …
1st February 2016
South Africa’s January manufacturing PMI provided further bad news for the beleaguered economy. The risk of a further slowdown in GDP growth this year is growing. The survey also showed that the fall in the rand has started to feed through into prices, …
The latest drop in oil prices, combined with Abuja’s unorthodox economic policies, sent Nigeria’s financial markets into a tailspin this month. Financial markets elsewhere on the continent also performed poorly as a result of low commodity prices and …
29th January 2016
Recent figures have only strengthened our belief that the challenges facing Africa’s three largest economies are growing. Nigeria’s botched response to low oil prices has caused the currency to plunge on the parallel market, which will spur inflation. The …
28th January 2016
The South African Reserve Bank has raised its key interest rate from 6.25% to 6.75% as inflation concerns outweighed worries about weak growth. We expect the bank will be forced to hike by another 50bp over the course of 2016. … South Africa: Rates …
Central Bank of Nigeria Governor Godwin Emefiele used the post-MPC meeting press conference to reiterate his commitment to retaining controversial FX restrictions. But with strains in the balance of payments building, we believe that the governor will, …
26th January 2016
While the Central Bank of Kenya held rates on hold today, we expect that the Bank will be forced to tighten policy by around 50bp later this year as inflation remains above target. … Kenya: Rates on hold despite higher …
20th January 2016
November’s surprisingly buoyant retail sales figures provide a rare piece of good news for South Africa’s struggling economy. But we expect that rising inflation and tightening monetary policy will weigh on consumer spending in 2016, keeping growth low. …
Low oil prices are battering Nigeria’s export-dependent economy. But it’s the government’s market-distorting response that risks pushing the country into a Venezuela-style crisis. … Nigeria: Policy response pushes economy towards …
18th January 2016
