Economic | - Part 2

Zambia | Plenty to do after elections says Bank of America Merrill Lynch

Lusaka, Zambia, Capital Markets in Africa — Our caution on Zambia, and hence our Underweight recommendation, was based on downside to copper prices and the government’s unwillingness to engage in an IMF program. Following our meetings with policymakers in Lusaka, we are now more confident that an IMF program will be taken, although our base case of a post-election program remains unchanged. We expect a program to start soon after the elections, regardless of who…

Cameroon | Boost from the AfDB through €500m guarantee

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Yaounde, Cameroon, Capital Markets in Africa — Much of the discussion in Yaounde concerned the €500mn partial credit guarantee given to Cameroon by the AfDB. This agreement covers the government’s payment obligations in a cross-currency swap they had entered with commercial banks to ensure dollar availability to service the obligations of its US$750m Eurobond issued in November 2015. From the AfDB press release, the guarantee appears to have been approved solely to limit exchange rate…

Ethiopia | Government-led growth model is maintained — BAoML

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Addis Ababa, Ethiopia, Capital Markets in Africa — Ethiopia’s government-led growth model shows no signs of significant change, with many meetings focused on investment in new industrial parks across the country as part of the second Growth and Transformation plan (GTP2) that runs from 2015 to 2020. The major investment areas are infrastructure, energy, and education/healthcare. GDP growth (which the IMF expects at c.8% in the medium term) continues to be driven by the government….

Gabon | Prioritizing spend in an election year — Bank of America Merrill Lynch

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Libreville, Gabon, Capital Markets in Africa —The Gabonese government is taking steps to mitigate the effect of lower oil prices (oil makes up 40% of revenues) by re-prioritizing its development plans. A supplementary budget is expected to be released in the summer, which will detail where spending can be cut with minimal social and growth impacts. The government is using US$30/bbl in the budget (compared to US$42 previously) and expects GDP growth of 3.2% and…

Nigeria: February Headline Inflation Surges to 38-month High

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LAGOS, Nigeria, Capital Markets in Africa — The National Bureau of Statistics (NBS) released the Consumer Price Index (CPI) figures for February 2016 today with the major Headline Index and Sub-indices at record high double-digit levels. February Headline Inflation – measured Year-on-Year (Y-o-Y) was estimated at 11.4%, 1.8% higher than 9.6% reported in January. Headline inflation has been on a steady rise since December 2014 (8.0%) with the only decline in October 2015. The current…

Nigeria’s GDP growth slows in 2015 amidst forex liquidity constraints

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LAGOS, Nigeria, Capital Markets in Africa — The Nigeria National Bureau of Statistics released economic performance data for the fourth quarter of 2015 on Friday 11 2016. The release showed that Africa’s largest economy grew by 2.1% year-on-year (yoy) in the fourth quarter against market expectations of 2.85%. The growth rate was also lower than the 2.84% recorded in the third quarter of 2015 and significantly lower than the 5.94% recorded in the fourth quarter of…

South Africa’s GDP grew by a modest 1.3% in 2015

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Johannesburg, South Africa, Capital Markets in Africa — In the final quarter of 2015, South Africa GDP rose by a very modest 0.6%q/q, annualised (seasonally adjusted). This compares with growth of 0.7%q/q in Q3 2015, 1.3%q/q in Q2 and 2.2%q/q in the first quarter of 2015. The latest GDP performance was slightly below market expectations, which was for growth of 0.9%q/q (STANLIB 0.9%q/q). Over the past year to Q4 2015, SA GDP rose by a…

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