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The Angolan government’s attempt to use external borrowing to plug the country’s twin fiscal and current account shortfalls opened by low oil prices is, at best, a temporary measure. This will increase foreign debt without reducing the economy’s …
29th April 2015
New figures from the World Bank confirm that Sub-Saharan Africa’s nascent banking sector is developing along a trajectory not seen in other emerging markets. The rapid expansion of a more inclusive financial sector will provide a boost to growth across …
27th April 2015
Nigeria’s 29th March election was a political triumph; the largely peaceful vote resulted in the country’s first-ever democratic transfer of power between presidents from different political parties. The clear result – Muhammadu Buhari won 54% of …
24th April 2015
This week’s high-profile meeting of African and Asian leaders in Indonesia is unlikely to lead to any concrete measures to boost trade or investment between the two continents. Even so, the crucially important – and frequently misunderstood – economic …
23rd April 2015
South African inflation picked up slightly in March, to 4.0%, but we expect that a combination of energy prices hikes and a weak rand will increase inflationary pressures going forward. Headline inflation is likely to breach 5% by the end of the year, …
22nd April 2015
Nigerian inflation picked up in March, due in large part to the weakness of the naira. While the currency has stabilised in recent weeks, we expect that the effects of its previous sharp depreciation will continue to feed through over the coming months, …
16th April 2015
February’s strong South African retail sales data suggest that the economy’s Q1 slowdown was less severe than we had feared. But even so, we expect that weakness in the mining and manufacturing sectors will keep growth subdued over the course of 2015. …
15th April 2015
The publication of South African Q4 balance of payments data last month grabbed the headlines because of the sharp reduction in the current account deficit, but the worrying rise in banks’ external borrowing went largely unnoticed. In this Watch , we …
14th April 2015
Data released today show that South African mining and manufacturing production was comparatively strong in February, but we believe that these figures provide a misleadingly optimistic view of the economy. Low commodity prices and a lasting electricity …
9th April 2015
The finalisation of Ghana’s three-year, US$918mn loan from the IMF is a very positive development, but we expect slow growth in 2015 and 2016 as the country’s economic unbalances unwind. That said, Ghana’s long-term outlook remains bright. … Ghana: IMF …
7th April 2015
It is difficult to overstate the importance of Nigeria’s recent election, which is setting up Africa’s most populous country and largest economy for its first ever democratic transition of power between two political parties. Even so, we stress that …
2nd April 2015
Last month’s South African manufacturing PMI provides further evidence that the rebound in growth seen at the end of 2014 was temporary and that the economy struggled once again in the first quarter of this year. Indeed, the survey suggests that …
The surprisingly smooth organisation of Nigeria’s 28 th March election has had little effect on the country’s financial markets so far. A violent crisis remains possible, however, if the losing candidate refuses to accept the result, which could spook the …
1st April 2015
Policymakers in South Africa kept interest rates on hold today, but the governor’s statement took a notably more hawkish tone that seemingly paved the way for rate hikes at the next meeting in May. It is worth noting that Governor Lesetja Kganyago has …
26th March 2015
All eyes are focused on Nigeria’s election on 28th March, which will almost certainly spark a brief period of political violence when (as seems likely) the losing candidate refuses to accept the result. And whoever is elected faces the challenging …
Saturday’s election will almost certainly spark a brief period of political violence when (as seems likely) the losing candidate refuses to accept the result. Beyond this, another term for incumbent President Goodluck Jonathan would prolong the current …
25th March 2015
Attention in South Africa has been focused on the impact of US monetary policy, but evidence that the economy has slowed sharply seems to have slipped under the radar. Our GDP Tracker suggests that growth weakened to less than 2% q/q (saar), down from 4% …
19th March 2015
A confluence of domestic and external factors will cut Sub-Saharan Africa’s economic growth in 2015 to its slowest rate this century. Low commodity prices will reduce export earnings and force fiscal policy to tighten. This is likely to lead to a period …
18th March 2015
The fall in South African inflation to a four-year low of 3.9% y/y was driven entirely by a further drop in petrol inflation. But core inflation remained strong and the latest fall in the rand is likely to keep it high. Against this backdrop, while …
The sharp fall in South Africa’s current account deficit in Q4, from 5.8% to 5.1% of GDP, was driven almost entirely by a fall in imports, which reflects lower energy costs. Nonetheless, given the country’s power crisis, this improvement may not be …
17th March 2015
The fall in South African manufacturing and mining output in January supports our view that the rebound in economic growth seen in Q4 was only temporary. We expect GDP growth to return to a more sluggish 2.0% this year. … South Africa Manufacturing …
12th March 2015
On the face of it, Nigeria’s banking system appears to be in good health following a round of recapitalisations in 2011, but its exposure to the oil sector and to naira depreciation mean that additional capital injections may be required in the near …
10th March 2015
South Africa’s energy crisis has grabbed headlines over the past month, with Finance Minister Nlahnlah Nene citing the situation as one factor behind the government decision to cut its 2015 growth forecast from 2.5% to 2.0%. The government is waking up …
9th March 2015
It looks more likely than not that Dr. Haron Sirima will replace Prof. Njuguna Ndung’u as Governor of the Central Bank of Kenya, and his appointment is likely be welcomed by the markets as a safe pair of hands. The bigger picture, though, is that …
6th March 2015
Recent declines in commodity prices will drag on growth in Sub-Saharan Africa this year. What’s more, growth in agriculture and mining during the commodities boom came at the expense of the manufacturing sector – the most reliable source of long-run …
5th March 2015
February’s South African manufacturing PMI figure of 47.6 was the weakest in eight months and, on past form at least, points to a 4% y/y contraction in manufacturing output. Admittedly, the sharp fall compared to January’s strong reading appears to have …
2nd March 2015
The delay to Nigeria’s election and the controversy over the alleged misappropriation of oil revenues have cast the spotlight on the country’s weak governance. After the decision to delay the election was announced on 7th February, the naira came under …
27th February 2015
The Central Bank of Kenya (CBK) kept its benchmark interest rate unchanged at 8.50% today, but we think that currency weakness and the return of inflationary pressures will prompt the bank to raise its key rate by early 2016. … Kenyan interest rates …
26th February 2015
Finance Minister Nhlanhla Nene today presented an annual budget that raised consumption taxes in an effort to limit South Africa’s fiscal deficit, a move that will add to the headwinds facing economic growth. However, the government’s new economic …
25th February 2015
Sentiment towards Nigeria has soured following news that presidential elections scheduled for earlier this month will be postponed until 28th March due to security concerns. We expect that the naira will continue to weaken in the run-up to the vote. … …
24th February 2015
South Africa’s economy grew at its strongest pace in a year Q4, but this was largely a result of a temporary rebound following weakness in previous quarters, and so is unlikely to be sustained. Nevertheless, we think that the economy is likely to perform …
The latest official activity data suggest that South Africa’s economy ended 2014 on a high. While the strong quarterly expansion in Q4 is unlikely to be sustained, the economy still looks set to perform better in 2015 as a whole than it did last year. … …
19th February 2015
The prospects for Nigeria’s exports are bleak. The country’s oil exports are suffering not just from lower prices but also from an apparent structural decline in demand. What’s more, despite the recent weakness of the naira, exports from the non-oil …
12th February 2015
December’s rise in South African manufacturing production showed that the sector ended the year on a high. There are also signs that manufacturers started this year fairly strongly. Although growth is unlikely to take off, the sector is likely to perform …
10th February 2015
The decision to delay Nigeria’s general election by six weeks has cast the spotlight back onto Nigeria’s weak institutions. While there have been some improvements over the past few years, much more is needed if the economy is to grow quickly over the …
9th February 2015
Next week’s general election in Nigeria looks likely to be the most closely contested since the country returned to democracy in 1999. The waning in President Goodluck Jonathan’s popularity since he was elected in 2011 is unsurprising, given that the …
6th February 2015
The issuance of over USD18bn worth of US dollar denominated debt by Sub-Saharan African (SSA) states has raised concerns about the region’s rising level of indebtedness, but we believe that most of these fears are largely misplaced. Overall debt levels in …
5th February 2015
January’s PMI figure of 54.2 was the strongest in 16 months, and points to manufacturing growth of about 5% y/y. Nonetheless, Kagiso , which publishes the data, acknowledged that issues with the seasonal adjustment process may have distorted the figure …
2nd February 2015
The surprisingly large improvement in South Africa’s trade balance in December underlines the degree to which the country is benefiting from lower oil prices. This should ease pressure on the rand, and it supports our view that the South African Reserve …
30th January 2015
Policymakers in South Africa kept interest rates on hold today, but struck a significantly less hawkish tone in the accompanying statement. Accordingly, we no longer expect rates to be raised this year, and expect only modest hikes in 2016. … Kganyago …
29th January 2015
The Nigerian naira has remained under pressure over the past month and we expect that it will fall further as foreign reserves dwindle and the currency continues to adjust to lower oil prices. We have revised down our end-year forecast to 210/$, a 9% fall …
27th January 2015
There are encouraging signs that South Africa’s power shortages will ease in the medium term. But this year, they are likely to continue to drag on economic growth. … Electricity shortages to stymie South Africa’s …
26th January 2015
The dramatic fall in oil prices pushed inflation down in much of Sub-Saharan Africa at the end of last year, and it is likely to slow further this year. This would lead policymakers in some of the region’s major economies to postpone policy tightening. …
23rd January 2015
The sharp slowdown in South African inflation, to 5.3% y/y, in December was driven almost entirely by the impact of lower oil prices on petrol inflation. Core price pressures remain strong. But with the headline inflation rate now comfortably within the …
21st January 2015
The upcoming general election may have influenced the Central Bank of Nigeria’s (CBN’s) decision to leave interest rates unchanged today. We suspect that once the election is out of the way, monetary policy will need to tighten in order to reduce …
20th January 2015
GDP growth in South Africa seems to have picked up in Q4 2014, but this acceleration is unlikely to last into 2015. Growth was flattered by base effects and we expect that lasting structural constraints will keep economic expansion low in 2015 and 2016. … …
The dramatic fall in oil prices since last summer will take a significant chunk out of the Nigerian government’s tax receipts, but we do not think it will be disastrous. Although measures to boost non-oil revenues and cut expenditure will drag on growth, …
15th January 2015
Ghana’s GDP growth picked up in Q3, to 5.1% y/y, following a sharp slowdown in Q2. But given the declines in commodity prices, and tight monetary and fiscal policy, we think that the economy will grow at its slowest pace since the 1980s this year. …
14th January 2015
The decline in December’s manufacturing PMI suggests that the sector ended 2014 on a low point. Although it probably contributed strongly to GDP growth over Q4 as a whole, that looks unlikely to be sustained this year. … South Africa Manufacturing PMI …
November’s fall in South African manufacturing production was perhaps overdue given the strength of output in previous months. The sector is still likely to have contributed positively to GDP growth in Q4. … South Africa Manufacturing Production …
12th January 2015
