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South African Q4 GDP surprised on the upside but, 2009 aside, sub-Saharan Africa’s (SSA’s) largest economy still grew at its slowest pace for over a decade over the course of last year as a whole. Meanwhile, recent data for Kenya and Ghana suggest that …
27th February 2013
South African Q4 GDP surprised on the upside but, 2009 aside, the economy still grew at its slowest pace for well over a decade last year. The drag from the mining sector is likely to ease over the coming quarters and a weaker rand should provide some …
26th February 2013
Following a strong start to the year, the rally in sub-Saharan African equity markets has lost a little steam in the past few weeks. Nevertheless, the MSCI frontier Africa index is still up by around 7% since the start of 2013, and continues to …
22nd February 2013
A boom in oil production should ensure that economic growth in Angola remains strong over the next two years. But an overreliance on the hydrocarbons sector, coupled with perennial concerns over governance, means that the economy may struggle relative to …
20th February 2013
The scope for rapid “catch-up” growth, allied with improving levels of governance, point to a relatively upbeat outlook for most of sub-Saharan Africa over the next decade or so. By contrast, a lack of reform in the comparatively richer economy of South …
19th February 2013
An improvement in global risk appetite and a sharp fall in emerging market bond yields over the past few months have led to a flurry of planned eurobond issues from countries in sub-Saharan Africa. This has led to some commentators voicing concerns over a …
15th February 2013
The recent slowdown in both growth and inflation in Ghana suggest that rates cuts are a possibility this year, but concerns over currency weakness and twin deficits mean that significant easing is unlikely. … Rate cuts still a possibility in …
13th February 2013
Buoyant domestic demand should ensure that sub-Saharan Africa remains one of the world’s best performing regions over the next two years, even if the global economy remains weak. We are particularly upbeat on the prospects for Nigeria and Ghana, as well …
12th February 2013
Kenya is preparing to hold elections next month, and with little to differentiate the economic policies of the two leading presidential candidates, voting is likely to be based in large part on ethnic lines. This increases the risk of violence both during …
8th February 2013
Fears that some African countries are returning to a period of “original sin” - characterised by excessive borrowing in foreign currency - appear somewhat premature. External debt levels are far lower now than they were 10 years ago. What’s more, there is …
5th February 2013
Inflation remains lower in both east and South Africa compared to west Africa, but a combination of slowing inflation in west Africa and the fact that central banks here set higher inflation targets means that west African countries have greater scope to …
1st February 2013
South Africa recorded its first ever December trade deficit in 2012, adding to concerns over its deteriorating current account position. This is likely to ensure that the rand remains weak over the next few months, even if global risk appetite continues …
31st January 2013
The South African rand has suffered a large sell-off over the past month, taking it below 9.00/US$ and leaving it at its lowest level against the US dollar in almost four years. Given that policymakers in most emerging markets are worried about currency …
28th January 2013
This is the first edition of our new monthly Africa Markets Monitor . The purpose of this publication is to analyse major developments in local markets over the past month, and to give an update on our key market forecasts for sub-Saharan Africa. A …
25th January 2013
Concerns over the effects of a weakening rand on inflation will continue to leave the South African Reserve Bank with little room to loosen policy in order to support growth over the coming months. … South African Reserve Bank faces difficult balancing …
24th January 2013
Slowing inflation and sub-trend growth in Nigeria mean that interest rate cuts are likely this year, but concerns over fiscal profligacy and a weakening currency limits the room for significant easing. … Room for relatively small rate cuts in …
21st January 2013
Growth in South African retail sales beat consensus expectations in November. But with consumer confidence falling due to rising inflation and fears over job security, the outlook for private consumption as a whole is for steady rather than spectacular …
17th January 2013
The slump in South Africa’s PMI reading for December indicates that the manufacturing sector continued to feel the effects of weak demand from key export destinations, as well as constraints in the domestic supply chain at the end of last year. Looking …
16th January 2013
South African markets have enjoyed a stellar start to 2013. Equities have surged to new record highs, while bond markets have shrugged off recent ratings downgrades. But while the markets have rallied, the economy remains sluggish. In this Watch , we …
14th January 2013
The Central Bank of Kenya’s larger-than-expected 150bp rate cut to 9.50% today suggests that the easing cycle may not yet be at an end, but with inflation close to bottoming out, growth now picking up and the shilling depreciating, the more important …
10th January 2013
A slew of GDP data released since the Christmas period show that growth in a number of sub-Saharan Africa’s smaller economies slowed in the second half of 2012, but nevertheless confirm that the region was one of the world’s better performers last year. …
9th January 2013
The Kenyan shilling slipped to a seven-month low against the US$ this morning and we think that growing domestic political risk in the run-up to elections in March, coupled with a large current account deficit, could lead to further currency weakness in …
7th January 2013
A combination of renewed optimism over the state of the global economy and an acceleration in regional inflation suggests that the interest rate cuts that had looked imminent in some parts of sub-Saharan Africa only a few months ago may now be held back …
3rd January 2013
Growth across sub-Saharan Africa (SSA) has held up relatively well in the last few months of 2012. This is despite a weak global backdrop and the continued sluggish performance of South Africa, the region’s largest economy. Looking ahead to 2013, SSA will …
18th December 2012
News that South Africa’s deputy president Kgalema Motlanthe will challenge incumbent president Jacob Zuma for the leadership of the ruling African National Congress (ANC) has added an extra layer of intrigue to the party’s five-yearly elective conference …
13th December 2012
Our new GDP Tracker for Kenya suggests that the economy has picked up a little pace in the second half of 2012, but that growth remains subdued by recent standards. Looking ahead, the combination of a deteriorating external environment and heightened …
12th December 2012
A slew of data released this morning indicate that after slowing sharply in Q3, the South African economy got off to a poor start in Q4. But with inflation likely to accelerate further in the coming months, there is little that the Reserve Bank can …
11th December 2012
Allegations of vote rigging have clouded the general election in Ghana, but these shouldn’t undermine the overall positive impact that victory for incumbent president John Dramani Mahama should ultimately have on the country’s medium-term outlook. … …
10th December 2012
South Africa’s current account deficit was not as wide as expected in Q3, but the fact that it is being funded in large part by portfolio inflows means that external financing risks persist. The shortfall is one of several reasons why we expect the …
7th December 2012
The Bank of Uganda lowered its benchmark interest rate today for the ninth time this year but, with inflation ticking up and the shilling having depreciated in recent weeks, we think the rate cutting cycle has now come to an end. … Ugandan easing cycle …
4th December 2012
The small uptick in the South African manufacturing PMI in November suggests that the sector willnarrowly avoid a contraction in output in Q4, but does little to change the underlying picture of industrialweakness. … South African manufacturing remains …
3rd December 2012
Sub-Saharan Africa’s three major economies – South Africa, Nigeria and Kenya – have experienced mixed fortunes in the second half of this year. Early estimates of Q3 GDP for Nigeria suggest that the economy picked up a little pace from Q2, supported in …
30th November 2012
The final presidential debate before elections in Ghana next month revealed that neither of the two main candidates are likely to oversee a radical shift away from market-friendly policies. Accordingly, we think the country remains on course to outperform …
28th November 2012
South African GDP growth was worse than expected in Q3, and the outlook for the coming quarters is not very promising either. With strikes continuing to affect the mining sector, and signs of a deepening recession in the euro-zone likely to harm …
27th November 2012
The South African Reserve Bank kept its benchmark repo rate on hold at 5.00% today, but the prospect of subdued growth and easing inflation suggests that a rate cut is likely in 2013. … South Africa holds rates, easing to come next …
22nd November 2012
Discoveries of giant gas fields off the coast of East Africa in the past few months are likely to have a very positive impact on the economies of Mozambique and Tanzania. But while both countries stand to benefit from the finds, there is a need to …
21st November 2012
The Central Bank of Nigeria kept interest rates on hold at 12.00% today, but the outlook for slowing inflation and sub-trend growth means that monetary easing is likely to come onto the agenda in 2013. … Central Bank of Nigeria likely to cut rates next …
20th November 2012
The Capital Economics South Africa GDP Tracker suggests that the economy slowed sharply in the third quarter of this year. We think annualised growth dropped to 1.5% q/q, from 3.2% q/q in Q2. This would leave the economy on course for a full-year …
16th November 2012
The Bank of Ghana kept its benchmark interest rate on hold at 15.00% today and, with inflation decelerating and concerns over the cedi easing, we expect rates to remain unchanged throughout 2013. … Bank of Ghana to keep rates on hold throughout …
14th November 2012
The recent peaceful transitions of power following elections in Senegal and Zambia demonstrate that the threat of voting-related violence in sub-Saharan Africa (SSA) has been receding in the past few years. And while it would be foolhardy to rule out any …
13th November 2012
The new weights assigned to components of the South African CPI basket, which are due to come into effect in January 2013, will have only a marginal impact on overall inflation. As such, the implications for monetary policy are limited, and we continue to …
8th November 2012
The Central Bank of Kenya cut its benchmark interest rate by 200bps to 11.00% today but, while there is still room for further easing, rates are unlikely to continue falling so sharply over the next few months. … Kenya cuts rates, pace of easing now set …
7th November 2012
After Nigeria’s banking crisis of 2008/09, some commentators are starting to voice fresh concerns about the recent rapid pace of growth in private sector credit. But while we share some of these concerns, it seems that the pace of credit growth is being …
6th November 2012
The Bank of Uganda lowered its benchmark interest rate by 50bps to 12.50% today and, looking ahead, we think there is scope for one further rate cut before the easing cycle concludes. … Ugandan rate cutting cycle close to an …
1st November 2012
South Africa’s manufacturing PMI slumped further in October, and is now at a level consistent with an outright contraction in GDP. … South African PMI now consistent with GDP …
The widespread mining sector strikes in South Africa over the past few months have focused attention on some of the country’s deeply entrenched socio-economic problems, which will require addressing in order to lift its medium-term growth potential. But …
31st October 2012
The forthcoming rebasing and revision of GDP data in Nigeria will change little on the ground, but it could leave the country on track to overtake South Africa as the region’s largest economy by 2014. … Nigerian economy could be region’s largest by …
29th October 2012
Growth across sub-Saharan Africa continues to hold up well, despite a weak global economic backdrop. Most countries have now released Q2 GDP data, with particularly strong performances recorded in Tanzania and Rwanda. The Nigerian economy is also ticking …
Increased oil and gas production should mean that Ghana outperforms the rest of the region and grows by 8-10% over the next couple of years. But beyond this, the key will be to ensure that energy revenues are spent wisely. In this regard, the outcome of …
26th October 2012
The South African Finance Ministry today nudged up its forecasts for the fiscal deficit over the next three years, but we suspect that the budget shortfall may still surprise on the upside. The good news, however, is that despite fears that this might …
25th October 2012
