Sub Saharan Africa Economic Forecast

Economic Snapshot for Sub-Saharan Africa

April 29, 2020

Growth is expected to deteriorate in 2020

The fast spreading Covid-19 pandemic is set to push the region into recession for the first time in over two decades this year as both external demand and domestic activity shrivel. Oil-exporting countries like Angola and Nigeria will be hammered, while South Africa’s recession will deepen. Limited fiscal room to respond to the crisis only exacerbates the dire outlook.



Sub-Saharan Africa Monetary & Financial Sector News

Inflation in Sub-Saharan Africa leaped to 18.8% in March (February: 16.9%). Stronger price pressures in Angola, stoked by a falling kwanza, and rising food inflation in Ethiopia and Nigeria, were mainly behind the pick-up. Regional inflation is expected to quicken this year from 2019, largely fueled by currency weakness and supply shortages induced by the coronavirus outbreak.

Overall, central banks across the region loosened their policy stances in recent weeks to cushion the economic fallout from the Covid-19 crisis. The notable exceptions were Angola’s and Nigeria’s monetary authorities, where risks of heightened inflationary pressures prompted them to stay put. As a whole, policymakers are seen further lowering rates by year-end.

All of the region’s currencies—except Uganda’s—lost further ground against the USD recently amid continued risk aversion due to the economic blowback from Covid-19 and falling commodity prices, with Angola’s kwanza, South Africa’s rand and Zambia’s kwacha being especially hard hit. Currencies will remain under pressure this year and depreciate more markedly than in 2019.


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Sub-Saharan Africa Economic News

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