Sub Saharan Africa Economic Forecast

Economic Snapshot for Sub-Saharan Africa

October 17, 2019

After a projected slowdown this year, growth is expected to pick up in 2020 on the back of strengthening activity in the region’s largest resource-rich economies: Nigeria and South Africa. That said, the outlook remains challenging, weighed on by domestic policy uncertainty, slow pace of reforms, commodity-price volatility, elevated trade tensions and weakening global growth. 

Sub-Saharan Africa Monetary & Financial Sector News

Inflation in Sub-Saharan Africa spiked to 12.1% in August (July: 11.2%), the highest print since May 2017. Stronger price pressures in Ethiopia and South Africa, and spiraling inflation in Zimbabwe were largely behind the acceleration. Looking ahead, inflationary pressures are seen moderating somewhat, in large part due to increased stability of exchange rates.

All major central banks in the region stayed put over the past month, with those of Angola and Kenya hinting at some loosening of policy ahead. As a whole, central bankers are expected to lower rates this year and next year amid abating inflation and increased scope from more accommodative conditions globally. 

Most currencies held largely steady in recent weeks. The notable exceptions were the South African rand, which weakened amid lower global risk appetite, and the Angolan kwanza which lost considerable ground against the USD on reduced FX supply in the market. Next year, most of the region’s currencies are expected to depreciate, albeit much less sharply than this year.

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