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: Inflation rises to over two-year high in August
September 15, 2020
Consumer prices rose 1.34% over the previous month in August, slightly above the 1.25% increase seen in July.
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South Africa: Decline in manufacturing activity softens in July
September 11, 2020
Manufacturing output slid 10.6% year-on-year in July, which was above the 15.8% decline logged in June.
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Ghana: Inflation falls to lowest level since April in August
September 10, 2020
Consumer prices fell a seasonally-adjusted 0.41% in August over the previous month, swinging from the 0.50% rise logged in July.
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South Africa: GDP records largest drop on record in Q2
September 8, 2020
The economy plunged deeper into recession in the second quarter, with GDP nosediving 51.0% at a seasonally-adjusted annualized rate (SAAR).
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Ghana: Operating conditions improve for the first time in six months in August
September 8, 2020
Midway through the third quarter, the economic recovery seems to be taking hold as private-sector business conditions improved: The IHS Markit Ghana Purchasing Managers’ Index (PMI) rose to 51.2 in August from 49.7 in July.
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