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Today’s decision by the Kenyan MPC to leave interest rates at 11.50% will give the economy a bit of breathing room, but we still expect that currency weakness will lead the CBK to hike rates to 13.00% by the end of the year. … Kenya: Rate hold does not …
6th August 2015
The slowly-unfolding budgetary crisis affecting Nigeria’s 36 state-level governments poses some risk to the central governmnet’s fiscal health. But, more importantly, it also exemplifies the flaws in an administrative system that discourages fiscal reform …
5th August 2015
South Africa’s manufacturing PMI remained stable at a relatively strong 51.4 in July, providing a rare piece of good news for the economy. But we still doubt that manufacturing will be a significant source of growth this year. … South Africa Manufacturing …
3rd August 2015
The surprisingly large improvement in South Africa’s trade balance in June was the result of rising exports, rather than just weak import demand. This is a positive sign for the economy, which has struggled due to weak manufacturing output and a …
31st July 2015
An audit of government expenditure provides yet more evidence of widespread corruption in Kenya. But while the new findings make for grim reading, the existence of the report – and others like it – is a positive sign that the quality of governance is …
30th July 2015
The South African Reserve Bank (SARB) finally began its long-awaited tightening cycle by raising the repo rate from 5.75% to 6.00% this month. We had anticipated the move, and expect that the SARB will hike rates by another 25bp later this year as …
29th July 2015
The high yield demanded for Zambia’s recent Eurobond is not just a sign of that country’s deteriorating fiscal position. Market sentiment towards Sub-Saharan African government debt seems to be turning. … Zambia: New Eurobond raises regional debt …
28th July 2015
The South African Reserve Bank (SARB) hiked its key interest rate from 5.75% to 6.00% today, judging that the threat of elevated inflation outweighed the risk of choking off already weak growth. The governor stressed that the tightening cycle will be …
23rd July 2015
South African inflation came in at a below-consensus 4.7% y/y in June, but inflation remains on an upwards trend. While this surprise result will take some pressure off the Reserve Bank, we still expect that an interest rate hike is more likely than not …
22nd July 2015
The rapid appreciation of the cedi over the past month is a positive sign, but it should not be taken to mean that Ghana has successfully resolved its economic problems. The country’s economy remains fragile, and another bout of currency weakness is very …
20th July 2015
Today’s retail sales figures confirm that consumer spending growth in South Africa is faltering, weakening the one sector that has propped up growth so far in 2015. This supports our below-consensus growth forecasts for the country. … South Africa: Last …
15th July 2015
The seemingly inexorable rise of Nigerian inflation – which reached a 28 month high of 9.2% y/y in June – will add to the pressure on the central bank to raise interes trates later this year. … Nigeria Consumer Prices …
14th July 2015
Today’s decision to hike interest rates by 150bp reflects the Bank of Uganda’s concerns about currency weakness. But with export prices subdued and political risk rising, we expect that the shilling will remain under pressure. We have pencilled in another …
13th July 2015
Kenya has been in the headlines for all the wrongreasons over the past few months, and its economy is struggling. But while the country faces realproblems, we still believe that the economy holds significant long-term potential. … Kenya: Long-term outlook …
The surprise move by Kenya’s Monetary Policy Committee to hike its key interest rate by 150bp today, for the second consecutive meeting, was a signal that the new Governor is serious about curbing high inflation and protecting the depreciating shilling. …
7th July 2015
The dramatic fall in South Africa’s consumer confidence index in Q2 provides yet another sign that consumer spending growth will slow over the course of the year. This is a particularly worrying signal for the economy, which has become reliant on consumer …
2nd July 2015
Kenyan GDP growth slowed to 4.9% y/y in Q1 due to a contracting tourism sector and tepid growth in the agricultural industry. However, we think that the slowdown has bottomed out and that growth will accelerate over the course of the year. … Kenya GDP …
1st July 2015
South Africa’s manufacturing PMI rose to 51.4 last month, providing another signal that the economy picked up a little in the second quarter. … South Africa Manufacturing PMI …
This month has seen most key African currencies depreciate and key equityindices fall. But while Europe’s latest crisis may have had some marginal effect oninvestor risk sentiment, the key drivers of market moves in Sub-Saharan Africa(SSA) have been …
30th June 2015
South Africa’s energy regulator has rejected a proposed hike to electricity prices, sparing South Africa’s overstretched consumers the pain of higher prices. But the decision will only exacerbate the sector’s financial woes, which have already led to …
29th June 2015
April’s activity data hinted at an uptick in South Africa’s economy, but we believe that thecontinent’s most developed economy will continue to face significant headwinds over the comingmonths. Growth in Q1 fell to just 1.3% q/q saar, and the economy was …
South Africa’s official unemployment rate hit a ten year high of 26.4% in Q1 2015, hammering home the scale of the country’s jobs challenge. Indeed unemployment in the country is more widespread than in crisis-wracked Greece. In this Watch we look a the …
25th June 2015
Most economies in Sub-Saharan Africa (SSA) are struggling under the weight of low commodityprices, weakening currencies, and slowing growth in China. In 2015 regional growth will slow to itsweakest rate since 1999. In Nigeria, South Africa, and Angola – …
24th June 2015
The Central Bank of Nigeria’s decision to further tighten restrictions on foreign exchange market will not succeed in reducing demand for dollars. Faced with weak export earnings and tumbling FX reserves, the country’s exchange rate does not look …
Figures released today showed that South Africa’s retail sector has remained surprisingly resilient in the face of power shortages, and rising inflation. A string of relatively strong growth figures this month strengthens the case for a 25bp rate hike in …
17th June 2015
President Muhammadu Buhari’s long delay in appointing a new federal cabinet is detracting from his reputation as a decisive reformer and may be a sign of deep divisions within the ruling power. The holdup means that Nigeria probably faces a long period of …
16th June 2015
East African governments’ focus on infrastructure spending will provide a boost for growth, but fiscal deficits in Kenya and Uganda are likely to remain a concern. Revenue projections rely on optimistic growth forecasts, raising the risk that deficits …
12th June 2015
Mining and manufacturing output figures released today showed that growth remained weak in two key sectors of the South African economy. And the spectre of wage disputes suggests that the mining industry faces even more difficult times ahead. … South …
11th June 2015
Media coverage of Africa’s “Tripartite Free Trade Agreement” has exaggerated the pact’s effect on economic integration, which will be limited by piecemeal implementation and crumbling infrastructure. Even so, any effort to reduce the many barriers to …
10th June 2015
Kenya’s Monetary Policy Committee hiked its key interest rate by 150bps today, a clear attempt to signal that the bank is serious about curbing high inflation and protecting the rapidly-depreciating shilling. A further hike later this year is possible, …
9th June 2015
Declining tourist numbers pose yet another threat to South Africa’s already beleaguered economy. And the impact of onerous new visa regulations are likely to make the situation even worse. … South Africa: faltering tourism sector deals blow to …
4th June 2015
The recent weakness of the Kenyan shilling is not, as some local media has alleged, the first sign of an impending balance of payments crisis. The shilling will probably continue to depreciate, but pressure should ease as the current account deficit …
3rd June 2015
Growth in oil-rich Gabon is highly dependent on government spending, and low oil prices are causing a painful fiscal crunch that is dampening economic activity. Faltering economic expansion will increase political tensions in the lead up to the 2016 …
2nd June 2015
May’s South African manufacturing PMI reading of 50.8 was a rare piece of positive news for the country, which has seen a run of dispiriting economic figures. Even so, this figure is consistent with a very weak rate of output growth. … South Africa …
1st June 2015
The inauguration of President Muhammadu Buhari this morning was met with widespread optimism in Nigeria, but the 72-year old must act quickly if he is to retain the political momentum and make serious progress in addressing Nigeria’s many economic and …
29th May 2015
Sub-Saharan Africa’s youthful demographic profile is often cited as a potential engine of economic development, but we believe that this argument significantly overstates the economic benefits of rapid population growth. In practice, the structure of most …
27th May 2015
Q1 GDP figures released today showing that economic growth in South Africa plummeted to 1.3% quarter on quarter at a seasonally adjusted annualised rate are very bad news. Several temporary factors ought to have boosted growth in Q1, and the poor outturn …
26th May 2015
South Africa’s rand rallied over the past month, despite a string of weak economic data suggesting that growth is slowing and inflation is picking up. Nigeria’s naira held steady, but yields on the country’s 2021 Eurobond rose by 50bps following news that …
22nd May 2015
The decision by South Africa’s MPC to hold the repo rate at 5.75% was accompanied by a statement that clearly paved the way for rate hikes over the coming months. We have pencilled in a 25bp rate hike at the next meeting, which is scheduled for 23rd …
21st May 2015
Figures released today showed that South Africa’s retail sector faltered in March, supporting our view that GDP growth in the first quarter was a disappointing 2.0% in quarter-on-quarter, seasonally adjusted terms (q/q saar). A variety of structural …
20th May 2015
Inflation in South Africa rose to 4.5% in April, and we expect that it will continue to rise over the coming months. Accelerating inflation will put pressure on the Reserve Bank to raise interest rates, and we expect a hike of 25bps within the coming …
The Nigerian Monetary Policy Committee’s decision to leave its key interest rate at 13% at today’s meeting was not a surprise, but Governor Godwin Emefiele’s comments at the post-meeting press conference seemed notably less hawkish. We expect that around …
19th May 2015
This report is only available as a PDF. Click to download. … South Africa: poor corn harvest poses little inflation risk …
15th May 2015
Q1 GDP figures released today, showing that growth in Nigeria slowed to 4.0% y/y, support our view that the economy will perform poorly in 2015. Growth in both the oil and non-oil sectors was subdued in the first quarter. Weak growth and the stabilisation …
14th May 2015
The Bank of Ghana justified its surprise decision to hike its policy interest rate, from 21% to 22%, today by pointing to elevated inflation, although we think that pressure from the IMF also played a role. While the surprise move makes the Bank’s policy …
13th May 2015
The surprisingly rapid expansion of South Africa’s manufacturing output by 3.8% y/y in March is unlikely to signal a significant turnaround for the embattled sector. We expect that labour disputes and the ongoing power crisis will cause growth to slow …
12th May 2015
Lower oil prices should have reduced Kenya’s wide trade deficit and taken some of the pressure off the struggling Kenyan shilling, but the currency was Sub-Saharan Africa’s worst-performing last month. This seems to be because of the poor performance of …
7th May 2015
Kenya’s Monetary Policy Committee kept its benchmark interest rate unchanged at 8.50% today, but the Committee’s increasingly hawkish tone leads us to believe that rate hikes will come in late 2015 rather than early 2016. We’ve pencilled in 100bps of …
6th May 2015
Falling oil revenue will cause Nigeria’s fiscal deficit to widen in 2015, but we do not expect the shortfall to exceed 2% of GDP. Despite talk of tightening fiscal policy, federal government spending in 2015 will probably exceed the levels seen in 2014. …
5th May 2015
Kenyan inflation rose by a stronger-than-expected 7.1% y/y in April, and we believe that weak food production and the depreciation of the shilling will increase inflationary pressures later in the year, raising the chance of an early rate hike. … Kenya …
30th April 2015
