Economic Snapshot for Sub-Saharan Africa
June 29, 2020
The region to suffer its worst contraction on record this year
The region will likely suffer its worst contraction on record this year as the Covid-19 pandemic ravages activity. Languishing demand from key trading partners; steep declines in prices for commodities like oil, minerals and metals; and drastic containment measures domestically will pummel economies. Rising public debt burdens and limited fiscal space cloud the outlook further.
Sub-Saharan Africa Monetary & Financial Sector News
Regional inflation edged up to 15.2% in May (April: 15.0%). Rising food inflation in Angola, Ghana and Nigeria in large part drove the acceleration, while inflation keeps soaring in the triple digits in Zimbabwe. Ahead, inflation in Sub-Saharan Africa is set to remain elevated and above 2019, fueled by weaker currencies and supply disruptions induced by the pandemic.
While the central banks of Botswana and Kenya stood pat in recent weeks, the monetary authorities of Mozambique and, most notably, Nigeria, lowered their benchmark rates. Nigeria’s move surprised market analysts amid the risk of fueling already-elevated inflation. As a whole, policymakers are broadly expected to stay put ahead.
Currency performance across Sub-Saharan Africa was mixed recently. Most notably, the Angolan kwanza’s slide against the USD shows no signs of abating, while the South African rand continued to recoup some of the heavy losses it has taken since the outset of 2020. This year, the majority of currencies in the region are projected to depreciate more sharply than in 2019.
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Sub-Saharan Africa Economic News
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Nigeria: PMI rises again in June but remains in contractionary territory
July 3, 2020
The Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) rose from 40.7 in May to 46.4 in June.
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Ghana: Private-sector conditions worsen marginally in June
July 3, 2020
Business conditions in Ghana’s private sector nearly stabilized at the end of the second quarter, with the IHS Markit Purchasing Managers’ Index (PMI) coming in at 49.7 in June from 46.7 in May.
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South Africa: PMI rises further in June
July 3, 2020
The South Africa IHS Markit PMI pulled up from an all-time low of 32.5 in May to 42.5 in June.
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South Africa: South Africa: Economy sinks deeper into recession in Q1
June 30, 2020
The economy slid deeper into recession in the first quarter, contracting 2.0% over the previous quarter at a seasonally-adjusted annualized rate (SAAR) amid lockdown measures to contain the spread of the coronavirus.
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Kenya: GDP growth slumps to over two-year low in Q1
June 30, 2020
GDP growth slowed to 4.9% year-on-year in the first quarter, down from 5.5% in the fourth quarter of last year, according to Kenya’s Statistical Institute (KNBS).
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