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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
Concerns over the impact on sub-Saharan Africa (SSA) of a further slowdown in China have resurfaced over the past couple of weeks. While we do not expect China to experience a hard landing, we do think that growth there will continue to weaken over the …
28th March 2014
Following its surprise hike in January, the recent rally in the rand enabled the South African Reserve Bank (SARB) to keep interest rates on hold today. But the bigger picture is that, with South Africa still among the most vulnerable EMs to a slowdown in …
27th March 2014
In its first MPC meeting since the suspension of Governor Lamido Sanusi, the Central Bank of Nigeria (CBN) kept interest rates on hold at 12.00% today. The case for conventional tightening is building, but we suspect that, given the proximity of national …
25th March 2014
The Zambian kwacha has become the latest African currency to come under fire, and has this month slumped to an all-time low against the US$. This follows similar falls in the Ghanaian cedi and Nigerian naira earlier in the year. The gradual tightening of …
20th March 2014
Clouds have gathered over the outlook for sub-Saharan Africa (SSA) over the past few months due to growing concerns over widening twin budget and current account deficits and the effects of a slowdown in China. But while vulnerabilities are mounting at an …
19th March 2014
The proposed rebasing and revision of historical Nigerian GDP data, due to be released at the end of this month, are likely to show that the country has overtaken South Africa as the region’s largest economy. What’s more, a higher rate of trend growth …
14th March 2014
South Africa’s current account deficit fell to close to a two-year low in the final quarter of last year. But while on paper this appears to be good news, a deeper look reveals that it was driven primarily by a fall in imports, rather than a rise in …
12th March 2014
Sub-Saharan Africa (SSA) grew at its second slowest pace since 2000 last year and, though we expect a modest acceleration this year, growth is likely to remain below the rates seen over the past decade. With global monetary conditions set to tighten over …
6th March 2014
The Central Bank of Kenya (CBK) was able to keep interest rates on hold today as the shilling has remained stable despite the recent turmoil in EM currency markets. But a large current account deficit that is being funded by short-term inflows of capital …
4th March 2014
The latest PMI survey for South Africa suggests that, having rebounded in Q4, growth in the manufacturing sector has stabilised in the current quarter. But while this provides grounds for some optimism, there are still a number of challenges facing local …
3rd March 2014
The turmoil in EM financial markets over the past six months has spread to a number of economies in sub-Saharan Africa (SSA), taking some of the gloss off the region’s upbeat growth story in the process. The realisation that global monetary conditions are …
27th February 2014
South Africa’s Finance Minister Pravin Gordhan announced new projections for smaller fiscal deficits over the coming years in today’s budget statement, but we think that these are unlikely to be met. The bond market also appears to be unconvinced, as …
26th February 2014
Despite the acceleration in Q4, the South African economy grew at its second slowest pace in 15 years in 2013. Looking ahead, a number of domestic and external constraints suggest that growth will remain lacklustre in 2014 and 2015. To compound matters, a …
25th February 2014
The recent turbulence in EM currency markets has spread to some of Africa’s major economies, with the Ghanaian cedi and Nigerian naira slumping to all-time lows against the US$ this month. The South African rand has also been hit hard. Looking ahead, a …
21st February 2014
Signs that the recent turbulence in EM markets is spreading to sub-Saharan Africa (SSA) have caused some to question the region’s upbeat growth story. But while some vulnerabilities are building and a few countries may now be entering a period of weaker …
20th February 2014
South African inflation rose in January and the effects of a weak rand means it is likely to accelerate above the upper bound of the Reserve Bank’s 3-6% target range again. This is likely to spur the SARB into more action following its surprise rate hike …
19th February 2014
Our GDP Tracker suggests that the South African economy picked up pace in the final quarter of last year. Nevertheless, full-year growth for 2013 is likely to have been the second worst outturn in 15 years and, looking ahead, the outlook for 2014 and 2015 …
13th February 2014
Zambia’s fiscal position has deteriorated markedly over the past few years despite the tailwind of high copper prices, which have boosted revenues. A relatively low burden of public debt means that a full blown fiscal crisis is not imminent but, …
12th February 2014
On the face of it, the fall in South Africa’s unemployment rate to a two-year low in Q4 is encouraging, but much of this can be explained by a rise in temporary employment in sectors that deliver low rates of productivity growth. Looking ahead, …
11th February 2014
The decision by the Bank of Ghana to aggressively hike rates today, combined with the FX restrictions announced yesterday, should bring some temporary relief to the cedi. However, a lack of progress in tackling the country’s enormous twin budget and …
6th February 2014
Following the South African Reserve Bank’s decision to hike interest rates last week in response to the recent turmoil in EM financial markets, Ghana looks set to be the next country in the region to tighten monetary policy, having brought forward its …
4th February 2014
South Africa’s latest manufacturing PMI suggests that the sector has started 2014 on a subdued note. The continued depreciation of the rand should eventually provide a boost for local industry over the coming months, but there are still a number of …
3rd February 2014
The South African Reserve Bank responded to the turmoil in EM currency markets by unexpectedly hiking interest rates this month. Rates were raised by 50bp to 5.50% and, looking ahead, we think policy is now likely to be tightened further over the coming …
31st January 2014
The dust is still settling on the SARB’s unexpected decision to hike interest rates yesterday, with the rand strengthening slightly against the US$ so far today. Nevertheless, the currency is still weaker now than it was prior to yesterday’s surprise …
30th January 2014
The South African Reserve Bank became the latest EM central bank to respond to the turmoil in currency markets by hiking interest rates today. However, if the decision to tighten was aimed at shoring up the rand, it failed to have the desired effect – at …
29th January 2014
The latest outbreak of strikes has cast a spotlight back on the problems in South Africa’s mining sector. Although it is difficult to predict how events will pan out from here, the disruption of platinum production is likely to weigh on GDP growth in Q1. …
27th January 2014
The South African rand has slumped to a five-year low over the past couple of days – in the process breaking through our end-year forecast of 11/$, which itself had been at the bottom end of consensus expectations only a few months ago. The rand has now …
24th January 2014
The Central Bank of Nigeria kept interest rates on hold today but, significantly, Governor Lamido Sanusi struck a notably more hawkish tone than has previously been the case in the accompanying press conference. In particular, he raised the possibility of …
21st January 2014
The key political event in sub-Saharan Africa this year is the elections for the presidency and national assembly in South Africa. Although it seems likely that Jacob Zuma will be re-elected as president and the ruling ANC party will retain power in the …
16th January 2014
