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The strong rebound in South African mining output in the early part of 2013 suggests that the sector made a decent contribution to overall GDP growth in Q1. But nevertheless, the sector still faces a number of challenges, including labour unrest and …
11th April 2013
Inflows of foreign direct investment to sub-Saharan Africa have increased markedly over the past decade or so, with growth being strongest in countries that have a) a large endowment of natural resources and b) improving levels of governance. Looking …
9th April 2013
GDP data released over the past week or so show that, while growth in a number of sub-Saharan Africa’s smaller economies slowed in the latter part of 2012, the region was still one of the world’s better performers last year. Looking ahead, we expect …
5th April 2013
Kenyan financial markets have rallied in the past few days following the Supreme Court’s ruling that the presidential election held in March was legitimate. Nevertheless, with growth appearing to have slowed and president-elect Uhuru Kenyatta facing trial …
3rd April 2013
After falling in 2012 and early 2013, yields on African eurobonds have edged up over the past few weeks. However, the sell-off in the bond market has not been confined to Africa, as the spread over Treasuries of the broad JP Morgan EMBI+ Index of emerging …
27th March 2013
Events in sub-Saharan Africa have been dominated by presidential elections in Kenya. By past standards at least, the vote was peacefully and markets have remained stable. The shilling has actually strengthened a little against the dollar since the start …
26th March 2013
Concerns over the impact of a weak rand on inflation leaves the South African Reserve Bank with little room to cut interest rates over the coming months, despite the outlook for subdued economic growth. … Weak South African rand leaves little room for …
20th March 2013
Although the Central Bank of Nigeria left interest rates on hold at 12.00% today, we still think that monetary easing will come onto the agenda later this year. However, a combination of loose fiscal policy and a weakening currency means that rate cuts …
19th March 2013
China’s rapid development and integration into the global economy has had important effects on a number of countries across sub-Saharan Africa (SSA). In this Africa Watch , we take a closer look at trade relations between China and SSA’s largest economy, …
18th March 2013
The growth outlook for sub-Saharan Africa (SSA) remains good. Admittedly, the region will not be immune from global headwinds, particularly from the ongoing recession in Europe. Export demand may also suffer if, as we expect, the rebound in China peters …
15th March 2013
The Central Bank of Kenya kept its benchmark interest rate on hold at 9.50% today and, with inflation having bottomed out and the current account deficit still a cause for concern, we think this marks the end of the monetary easing cycle. … Kenyan rate …
12th March 2013
On the face of it, an earlier-than-expected victory for Uhuru Kenyatta in Kenya’s presidential election has reduced the risk of public unrest and political uncertainty that had previously threatened to overshadow the poll. But a disputed result, as well …
11th March 2013
Over the past decade, fluctuations in the South African rand seem to have been driven primarily by changes in global risk appetite. But while risk appetite has improved over the past six months, the rand has weakened, and has in fact been the worst …
8th March 2013
Kenya’s parliamentary and presidential elections have so far passed relatively peacefully, helping to keep markets calm amid news that the results have been delayed due to technical problems. But the acid test will come only when there is a clearer …
6th March 2013
We doubt that Ghana’s fiscal deficit will fall as quickly as the Finance Ministry seems to expect in its 2013 Budget Statement. Coupled with the fact that growth is now picking up, this means that interest rate cuts now look unlikely this year. … Ghana: …
5th March 2013
The South African manufacturing PMI ticked up in February, but the overall sluggishness of export demand and problems in the domestic supply chain means the sector still faces significant challenges in the months ahead. … South African manufacturers …
1st March 2013
The Nigerian economy returned to trend growth in Q4 on account of a strong performance in the non-oil sector. Nevertheless, with the oil sector continuing to drag on headline growth and inflation now slowing, we think that interest rate cuts are still …
28th February 2013
The South African Finance Ministry today nudged up its forecasts for the fiscal deficit for the next three years, but we suspect that the budget shortfall may still surprise on the upside. … South Africa: fiscal consolidation postponed …
27th February 2013
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 …
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
