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The latest data show a general slowdown in inflation across Sub-Saharan Africa. A variety of factors contributed to this easing, including lower commodity prices and the unwinding of the impact of previous currency falls. But while we think this might …
30th October 2014
Concerns about the strength of the global economy, alongside a number of other factors, have weighed on Africa’s financial markets over the past month. Amid the gloom, South Africa’s markets have been among the stronger performers in SSA and emerging …
27th October 2014
Recent movements in commodity prices are unlikely to be enough to lower inflation in South Africa substantially. Indeed, exchange rate weakness and upcoming energy price hikes will put further upward pressure on inflation. As a result, we still think that …
23rd October 2014
Today’s medium-term budget statement provided some encouraging signs that the government is finally willing to implement fiscal consolidation measures in order to prevent the public finances from deteriorating further. But whether these plans will be …
22nd October 2014
While Ghana’s authorities continue discussions with the IMF about a possible programme, the macroeconomic situation in the country appears to be getting worse. We suspect that the eventual tightening of fiscal and monetary policy as a part of any deal …
21st October 2014
Our South Africa GDP Tracker suggests that economic growth picked up slightly in Q3, but was still very weak. As a result, there is a significant chance that GDP growth in 2014 as a whole undershoots our forecast of 1.5%. What’s more, we suspect that the …
16th October 2014
Kenya’s GDP growth accelerated in Q2 and this strength appears to have continued in Q3. But rising political risks and the prospect of tighter monetary policy are likely to prevent the economy from gathering much more pace in coming quarters. … Kenya’s …
13th October 2014
The South African Reserve Bank is set to hike interest rates over the coming months to shore up the currency and counter above-target inflation, but this will hit household spending. Based on a few assumptions, we think our forecast for a 125bp increase …
9th October 2014
African currencies have not been immune to the recent sell-off in EM financial markets, raising concern in some countries about rising inflation. In this Watch , we examine which economies are likely to be hit hardest by this currency weakness, and how …
7th October 2014
Stronger trade and investment links mean that Sub-Saharan Africa’s economy as a whole is more exposed to China’s than ever before. We forecast China’s economic growth to slow over the next few years, which would drag on growth in Sub-Saharan Africa. Among …
3rd October 2014
The pick-up in South Africa’s manufacturing PMI in September provides further evidence that the sector has come out of its recent slump. But even so, activity remains extremely weak and the prospects for the sector over the coming years look poor. … SA …
1st October 2014
The South African rand has come under pressure this month as renewed attention on monetary tightening in the US has put the country’s large current account deficit back into the spotlight. The latest financial market moves will make the job of the …
29th September 2014
Ghana’s markets have rallied in response to the news that the government has turned to the IMF for support, with the currency strengthening and the yields of dollar-denominated bonds falling this month. Elsewhere though, currencies have sold off, with the …
26th September 2014
Speculation is mounting that one of the current Deputy Governors will take over from Gill Marcus as Governor of the South African Reserve Bank. But the bigger picture is that, whoever is appointed, South Africa’s inflation problem and large current …
23rd September 2014
The weakness of Nigeria’s export sector is down to a variety of factors, including a lack of competitiveness, falling oil prices and the expansion of shale oil extraction in the US. These factors point to continued sluggish export growth over the next few …
22nd September 2014
The Central Bank of Nigeria (CBN) kept interest rates on hold today and we do not expect any major shifts in the stance of monetary policy in the near term. The risks to inflation are skewed to the upside, but the CBN is unlikely to tighten policy given …
19th September 2014
The decision by the South African Reserve Bank to leave interest rates unchanged at 5.75% today was overshadowed by the announcement that Governor Marcus will step down in November. Whoever assumes her role will inherit a tricky balancing act, facing weak …
18th September 2014
The Ghanaian authorities’ turn to the IMF and the subsequent rally in the cedi allowed the central bank to keep interest rates on hold today, in spite of above target inflation. Looking ahead, we think inflation will rise further over the coming months, …
17th September 2014
The Reserve Bank’s (SARB’s) recent bailout of African Bank has raised concerns over the state of South Africa’s wider financial sector. But as we explain in this Watch, although other smaller banks that follow the same business model as African Bank could …
10th September 2014
South Africa’s balance of payments data for Q2 make for grim reading. The current account deficit widened to its largest as a share of GDP since Q3 2013 and, while exports are likely to pick up later this year as mining production comes back online, …
9th September 2014
We think that the risks from the recent glut of foreign currency bond issuances by African governments are, for the most part, manageable. Granted, both Ghana and Zambia have turned to the IMF recently for support. But in general, we do not expect foreign …
8th September 2014
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
