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Inflation in South Africa fell to 4.6% y/y in August, below our expectations and those of other analysts. We still expect the SARB to hike interest rates later today, but today’s CPI figure means that there is a growing chance that it will leave rates …
23rd September 2015
The Central Bank of Nigeria kept its key interest rate on hold today, while its embattled governor reiterated his support for controversial FX policies in the face of growing criticism. An overdue cut to the reserve requirement will, at least, provide …
22nd September 2015
The creation of a Treasury Single Account for Nigeria’s federal government is a sensible step, but poor implementation has sparked an entirely avoidable liquidity freeze. While the Central Bank has the ability to contain the situation, the fumbled reform …
17th September 2015
Statistics South Africa has updated its calculations of retail sales figures, but the new data still paint a pretty miserable picture. Our GDP tracker suggests that the South African economy stagnated in July, raising the real risk of a recession in Q3. … …
16th September 2015
Data released this morning showed that South Africa’s current account deficit narrowed to 3.1% of GDP in Q2. While this is welcome news, a more detailed look at the figures highlight the economy’s serious structural problems. … South Africa Current …
15th September 2015
The surprise 100bp rate hike, to 25.0%, by the Bank of Ghana today appears to have been aimed at shoring up the cedi, particularly in light of the US FOMC meeting later this week. We expect monetary conditions in Ghana to remain tight for the foreseeable …
14th September 2015
Planned mine closures will deal a heavy blow to Zambia’s copper-dependent economy. But the country’s economic problems run deeper than the current fall in copper prices. We expect that the country faces a very difficult few years. … Zambia: Problems under …
11th September 2015
Manufacturing and mining output figures for South Africa released today were both above consensus, but both figures were distorted by the comparison with last year’s disruptions. Underlying growth in the economy remains weak. … South Africa Mining & …
10th September 2015
The expulsion of Nigeria from JPMorgan’s GBI-EM bond index will have little practical impact on Africa’s largest economy. But the move is an embarrassing blow to the Nigerian government’s economic reputation, and will add to calls for the naira to be …
9th September 2015
A combination of low commodity prices and domestic weaknesses will drag growth in Sub-Saharan Africa down to around 3.3% this year, a very grim figure for a region often touted as the “next China”. … Africa’s much-touted “rise” stalls in …
7th September 2015
On the face of it, Nigeria’s restrictions on access to foreign currency have been quite successful at stabilising the naira and the central bank’s foreign exchange reserves. However, the adverse economic impact of these restrictions is becoming more and …
3rd September 2015
The fall in South Africa’s manufacturing PMI last month provides yet further evidence of economic weakness. Perhaps the best that can be said is that the manufacturing sector’s performance so far in Q3 doesn’t seem to be quite as bad as it was in Q2. … …
1st September 2015
African financial markets performed poorly over the past month due to acombination of domestic economic problems and deteriorating investor sentimenttowards emerging markets on the back of worries about China’s economy. … China, domestic woes weigh on …
28th August 2015
Yesterday’s Nigerian GDP figures showed that the country’s economy slowed even more sharply than weexpected in the second quarter. While low oil prices have battered the economy, the recent figures pointto a slowdown caused more by structural weaknesses …
26th August 2015
The sharp drop in South African GDP in Q2 was the second worst outturn since the depths of the global financial crisis. Today’s data may prompt the Reserve Bank’s MPC to think twice before next month’s rate-setting meeting, but given the latest sell-off …
25th August 2015
Nigeria’s economy has struggled this year, with the most obvious cause being the recent collapse of global oil prices. But this isn’t the only obstacle to faster growth in Sub-Saharan Africa’s largest economy; many structural factors are weighing on the …
24th August 2015
Inflation in South Africa ticked up to 5.0% in July, and we expect that it will continue to rise over the coming months. Accelerating inflation and a weak rand mean that the Reserve Bank is likely to raise the repo rate from 6.00% to 6.25% next month. … …
19th August 2015
Many African central banks are running down scarce foreign exchange reserves in a doomed effort to defend overvalued currencies from painful adjustments. But with commodity prices likely to remain weak and US monetary policy set to tighten, the use of …
17th August 2015
Today’s figures show that Nigerian inflation remained at 9.2% y/y in July, but we still expect that inflation will pick up later in the year. FX restrictions and the eventual weakening of the naira will push up import prices over the coming months. … …
12th August 2015
Today’s manufacturing output figures were slightly above consensus, but still point to a contraction in the economically-crucial sector. Firms have failed to benefit from a weaker rand, another sign of South Africa’s crippling competitiveness problems. … …
11th August 2015
The Bank of Uganda’s decision to hike interest rates by another 150bp today was an effort to support the flagging currency. The hike is yet another example of Sub-Saharan Africa’s escalating tightening cycle. … Ugandan rate hike adds to African tightening …
10th August 2015
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
