Economy

LAGOS (Capital Markets in Africa) — The Central Bank of Nigeria is likely to keep rates on hold on today as it bids to support the recovery amid the second wave of Covid-19 infections. Inflation is surging, but policymakers view the above-target rate as unavoidable, with supply bottlenecks being amplified by the pandemic. The rate decision is expected at 1 p.m. London time. Activity in Nigeria has shown signs of improvement since the gradual opening…

JOHANNESBURG (Capital Markets in Africa) — In 2020, emerging market debt rocketed higher. Has necessary pandemic stimulus planted the seeds of future fiscal crisis? Bloomberg Economics’ analysis shows South Africa is vulnerable but Brazil, India, Indonesia, Mexico, and Russia are less exposed. Persistently low-interest rates partially offset the impact of higher borrowing. An increase in interest rates would raise the pressure, but from current low levels, the impact is likely manageable. Most of the debt…

NAIROBI (Capital Markets in Africa) — Kenya’s economy is expected to expand this year as activity resumes following Covid-19 lockdowns, boosting tax revenue and government spending. East Africa’s largest economy will probably expand 6.4% this year and growth will slow to 5.5% in 2022, with scheduled elections likely to dampen activity, Treasury said in a report on its website. The Treasury estimates that gross domestic product increased 0.6% in 2020, which would make it one…

LUSAKA (Capital Markets in Africa) — Zambia’s move this month to further subsidize fuel prices highlights the government’s balancing act of seeking to retain power while convincing the International Monetary Fund to approve a bailout before an election scheduled for August. The finance ministry removed a 16% value-added tax on gasoline and diesel prices from Jan. 1, which it said was necessary to avoid increases at the pump. The IMF opposes subsidies and that could…

ACCRA (Capital Markets in Africa) — Ghana’s economy contracted for a second straight quarter in the three months through September, even as the government eased restrictions imposed to curb the spread of the coronavirus pandemic. Gross domestic product declined 1.1% in the third quarter from a year earlier, government statistician Samuel Kobina Annim told reporters Wednesday in the capital, Accra. That compares with a contraction of 3.2% in the second quarter. The data may put…

GABON (Capital Markets in Africa): Moody’s Investors Service (“Moody’s”) has today affirmed the Government of Gabon’s Caa1 long-term issuer ratings and changed the outlook to stable from positive. The rating on Gabon’s foreign currency senior unsecured debt has also been affirmed at Caa1. The key driver for the outlook change to stable is Gabon’s more limited institutional improvements than previously seemed possible, combined with rising liquidity pressures from the coronavirus crisis and associated oil price…