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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5 years of Sub-Saharan Africa economic forecasts for more than 30 economic indicators.
Sub-Saharan Africa Economic News
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South Africa: Rand rebounds in May
May 25, 2020
The South African rand (ZAR) recovered some lost ground against the U.S. dollar over the past month, chiefly thanks to recovering investor sentiment as the government gears up to reopen the economy.
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South Africa: SARB further cuts rate to new record low in May
May 21, 2020
On 21 May, the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) slashed its main lending rate by 50 basis points to 3.75%.
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Nigeria: Inflation remains stable in April
May 21, 2020
Consumer prices rose 1.02% over the previous month in April, picking up from the 0.84% increase seen in March.
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Angola: Cabinda crude oil prices fall to over two-decade low despite lower output
May 20, 2020
The average price of Angola’s Cabinda crude plummeted to an over two-decade low of USD 14.1 per barrel (pb) in April, from March’s USD 33.1 pb.
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Ghana: Bank of Ghana stands pat in May amid greater upside risk to inflation
May 15, 2020
At its 15 May meeting, which was brought forward from 22 May due to the Covid-19 crisis, the Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) opted to stand pat and keep the policy rate unchanged at 14.50%, the lowest level since May 2012.
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