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The Central Bank of Kenya (CBK) kept its benchmark interest rate unchanged at 8.50% today, but the weakness of the shilling and the likelihood of a further rise in inflation mean that rate hikes are still on the cards over the next 6-12 months. … …
3rd September 2014
The rise in South Africa’s manufacturing PMI in August suggests that the recent downturn in the sector is beginning to ease as wide-scale strike action earlier this year has wound down. But while this provides grounds for optimism, there are still a …
1st September 2014
Ghana’s authorities bowed to the inevitable earlier this month by formally requesting assistance from the IMF in dealing with the country’s enormous twin budget and current account deficits. This follows hot on the heels of Zambia which, faced with …
29th August 2014
Today’s GDP data show that, following the contraction in Q1, the South African economy narrowly avoided entering recession in Q2. But the bigger picture is that the economy remains very weak. Output stagnated over the first half of 2014 and, looking …
26th August 2014
South African markets appear to have taken the collapse of African Bank and the subsequent decision by Moody’s to downgrade the ratings of the country’s four largest banks in their stride. Local equities have actually strengthened a little so far this …
21st August 2014
South Africa’s labour market rigidities have been a key constraint on economic growth over the past few years, but some recent developments have given glimmers of hope that much-needed reform can be implemented. In this Watch, we look at the progress made …
20th August 2014
The long-run growth outlook for sub-Saharan Africa (SSA) remains good, but recent developments have caused cracks to emerge in the “Africa Rising” story. Budget and current account positions have deteriorated sharply in the likes of Ghana and Zambia. Both …
15th August 2014
Our GDP Tracker suggests that, following the contraction in Q1, the South African economy avoided entering recession in Q2, but only by the skin of its teeth. The bigger picture is that growth remains very weak, and there is little reason to expect a …
14th August 2014
Recent moves by both Zambia and Ghana to request IMF help have focused attention on vulnerabilities in other economies in the region that run large current account deficits. But strong inflows of foreign direct investment in Tanzania, Mozambique and …
6th August 2014
Ghana’s authorities bowed to the inevitable on Sunday by formally requesting help from the IMF in dealing with the country’s enormous twin budget and current account deficits. The most likely form of assistance appears to be a Stand-By Arrangement, which …
4th August 2014
South Africa’s manufacturing PMI for July makes for grim reading. The index is now consistent with an outright contraction in the sector of around 5-6% y/y, and suggests that even our below-consensus forecast of overall GDP growth of 1.5% this year is too …
1st August 2014
The tightening cycles that began in Ghana and South Africa earlier this year continued in July and, in both cases, we think that further interest rate hikes are likely before the end of 2014. Ghana’s rate hike failed to stem the slide in the cedi, meaning …
31st July 2014
Following hot on the heels of Kenya’s debut auction, both the Ivory Coast and Senegal returned to the market in July with issues of 10-year dollar-denominated debt. With yields across the region remaining low yields by past standards, a number of other …
25th July 2014
South African inflation remained stable in June, but is probably set to rise in the near term, and is unlikely to fall back within the SARB’s target range until early 2015. This should be enough to prompt the SARB into continuing its gradual tightening …
23rd July 2014
The Central Bank of Nigeria (CBN) kept interest rates on hold at 12.0% today in what was Godwin Emefiele’s first meeting as governor. Looking ahead, rising inflation suggests that policy tightening is needed, but this is unlikely to occur until after …
22nd July 2014
Having raised interest rates by 25bp today on account of rising inflation, it is clear that the South African Reserve Bank (SARB) is in the midst of a gradual tightening cycle. Further rate hikes are more likely than not over the coming months but, given …
17th July 2014
Amid the recent sharp contractions in output from South Africa’s manufacturing and mining sectors, the better-than-expected performance from the retail sector comes as welcome news. But given that inflation remains high and labour market conditions remain …
16th July 2014
With President Goodluck Jonathan soon expected to announce his bid to run for another term in office, attention is quickly turning to Nigeria’s general election, which is now just over six months away. In this Watch, we outline some of the key factors …
15th July 2014
Slow progress in tackling the enormous twin budget and current account deficits means that today’s decision from the Bank of Ghana to hike interest rates is unlikely to curb the sharp depreciation in the cedi and soaring inflation. Looking ahead, further …
9th July 2014
Interest rates in Kenya were kept on hold at 8.5% today but, given the country’s large current account deficit and the fact that inflation is likely to rise above the Central Bank’s (CBK’s) target range in the near term, some modest monetary tightening …
8th July 2014
The latest set of business surveys suggest that, having contracted in the first quarter of this year, South Africa’s economy continued to struggle in Q2. Inflation remains a concern but with activity so weak and the rand now stable, the Reserve Bank is …
3rd July 2014
As the tailwinds from the past decade’s commodity boom fade, several economies in Africa are losing their shine. Zambia remains the focus of attention – faced with widening twin budget and current account deficits, the authorities formally requested …
26th June 2014
Sub-Saharan Africa’s eurobond markets hit the headlines again in June when Kenya became the latest country to issue dollar-denominated debt. With much of the region continuing to enjoy low yields by past standards, we think that a number of other …
23rd June 2014
The narrowing in South Africa’s current account deficit in Q1 is welcome insofar as it has been one of the country’s key vulnerabilities over the past couple of years. But the narrowing was due to a collapse in repatriated profits for foreign-owned …
18th June 2014
Concerns over policy credibility in Nigeria have surfaced over the past month. The Central Bank’s (CBN’s) new governor Godwin Emefiele recently hinted at moves towards looser monetary policy, despite the fact that inflation looks set to rise over the …
17th June 2014
In an attempt to drum up interest in its debut dollar bond issue, Kenya became the latest country in Africa to announce revisions to its measured GDP yesterday. Measured GDP has been revised up by around 20%, which in the process has helped to “improve” …
13th June 2014
The recent sharp widening of Ghana’s twin budget and current account deficits has fuelled speculation that the country may require some external help to stave off a fiscal and balance of payments crisis. For our part, we think that Ghana will probably now …
11th June 2014
Sub-Saharan Africa (SSA) is likely to remain one of the world’s best performing regions over the next couple of years but, in a number of countries, growing pains are starting to emerge. Budget and current account positions have deteriorated sharply in …
6th June 2014
In line with the general rally in EM financial markets over the past couple of months, the South African rand has posted significant gains against the US$ of late. But the rally has not spread to a number of other economies in sub-Saharan Africa. In …
29th May 2014
The South African economy contracted for the first time since 2009 in Q1 as the ongoing strike action in the mining sector proved to be more damaging than most had expected. Looking ahead, there are a number of reasons to suggest that a significant pick …
27th May 2014
Most currencies in Africa have posted substantial losses against the US dollar over the past month, with the Ghanaian cedi and Zambian kwacha slumping to record lows. What’s more, there are a number of reasons to think that currencies will remain under …
23rd May 2014
The recent strength of the rand allowed the South African Reserve Bank (SARB) to keep interest rates on hold today. But given that South Africa is still among the most vulnerable EMs to a slowdown in capital inflows and that inflation is set to remain …
22nd May 2014
The Central Bank of Nigeria (CBN) kept interest rates on hold at 12.0% today but, with inflation likely to accelerate and the naira likely to come under renewed pressure over the coming months, modest rate hikes are still on the cards. … Modest interest …
20th May 2014
The apparent re-emergence of political risk in a number of countries in sub-Saharan Africa (SSA) over the past couple of months has led some commentators to question the region’s longer-term growth prospects. But as we explain in this Watch , given the …
16th May 2014
Our GDP Tracker suggests that the South African economy grew at its slowest pace in nearly five years in Q1, with annualised GDP growth slumping to around 0.2% q/q from 3.8% q/q in Q4. … South Africa GDP Tracker suggests sharp slowdown in …
14th May 2014
Victory for the ruling African National Congress (ANC) in South Africa’s general election last week was largely expected and, as such, financial markets have taken the result in their stride. However, this belies the need for wide-scale structural reform, …
12th May 2014
Following a solid performance at the end of last year, the latest hard manufacturing production data from South Africa suggest that the sector dragged on overall GDP growth in Q1. What’s more, a pick-up in manufacturing output over the coming months seems …
8th May 2014
Voting has concluded in South Africa’s general election, and the early signs are that the ruling African National Congress (ANC) will retain a comfortable majority in the national assembly. Financial markets have taken the vote in their stride but, over …
The latest opinion polls suggest that the ruling African National Congress (ANC) party will retain its majority when South Africa votes for a new national assembly in next week’s general elections. But there are a number of factors for investors to look …
2nd May 2014
The Central Bank of Kenya (CBK) kept interest rates on hold today but, given the country’s large current account deficit and the fact that inflation is likely to rise over the coming months, some monetary tightening remains likely over the course of 2014. …
30th April 2014
Following significant revisions to historical GDP data, Nigeria was confirmed as the largest economy in Africa earlier this month. Measured GDP has almost doubled to US$510bn, placing Nigeria comfortably ahead of South Africa, which was previously thought …
29th April 2014
A combination of rising oil production and investment into its offshore hydrocarbons sector is likely to underpin strong economic growth in Angola over the next couple of years. But history suggests that it is difficult to sustain strong energy-led growth …
24th April 2014
South African inflation rose in March to the ceiling of the Reserve Bank’s (SARB’s) target range, and the effects of a weak rand and rising local food prices mean it is likely to accelerate further over the next six months or so. This should be enough to …
23rd April 2014
Following a woeful Q1, financial markets in Africa have stabilised in the early part of Q2. In most countries, bond yields have edged down and currencies have made modest gains. Nevertheless, there are still a number of reasons to think that currencies …
17th April 2014
The IMF last week made significant downward revisions to its economic growth forecasts for sub- Saharan Africa (SSA) for 2014-15, leaving them close in line with our own. Indeed, this is another sign of the consensus coming round to our view that a number …
16th April 2014
South Africa’s president, Jacob Zuma, looks set to triumph in next month’s election despite – rather than because of – the performance of the economy during his first term in office. Looking ahead, wide-scale reform is needed if Mr. Zuma is to oversee a …
9th April 2014
Revisions to measured GDP in Nigeria means the country now has a larger weight in regional GDP, accounting for a third of sub-Saharan Africa’s (SSA’s) economy. Given that Nigeria is likely to experience faster rates of growth and inflation than the rest …
8th April 2014
Measured GDP in Nigeria has almost doubled as a result of methodology changes announced this weekend, confirming it as the region’s largest economy and highlighting the significant development of the non-oil sector. Nonetheless, it is important to note …
7th April 2014
The Bank of Ghana kept interest rates on hold at 18.0% today, but rising inflation and a rapidly weakening currency mean that rates are still likely to be hiked again before the end of this year. We expect 200bp of hikes, which would bring the key policy …
2nd April 2014
The South African manufacturing PMI fell back in March and, taking Q1 as a whole, the survey indicates that the sector has been growing by around 1% y/y in the early part of 2014. This is weaker than growth of 1.6% y/y in Q4. … South Africa PMI points …
1st April 2014
