Economy

JOHANNESBURG (Capital Markets in Africa) – For a quarter-century, South Africa has been able to count on an investment-grade rating from Moody’s Investors Service. Bond buyers lately may be forgiven for wondering why. Financial markets have been pricing in a downgrade for months, and the other two major rating companies have had South Africa at junk status for two years. Should Moody’s follow suit, the nation would suffer enormous financial consequences. For one, the country would lose its place…

NAIROBI (Capital Markets in Africa) – Kenya’s debt-ceiling review not only shifts the goalposts but also changes the rules on how goals are scored, and that could move the government closer to debt distress. Lawmakers last week approved the government’s plan to present the debt limit in absolute figures and not as a percentage of gross domestic product. The National Treasury proposed a ceiling of 9 trillion shillings ($86 billion), which allows it to increase…

LAGOS (Capital Markets in Africa) – The shutdown of Nigeria’s land borders to tackle rampant food smuggling and encourage an agricultural revival in Africa’s top oil producer is having an unintended side effect: higher inflation. A spike in food prices saw the annual consumer-inflation rate rise to 11.2% in September, after falling to a 3 1/2-year low in the preceding month, the National Bureau of Statistics said Tuesday. Food-price growth accelerated for the first time…

NEW YORK (Capital Markets in Africa) – The U.S. economy’s growth rate is losing speed, prompting questions over how slow it can go and still avoid crashing into a recession. Whereas expansion below 2% used to almost guarantee the economy would subsequently contract, some economists now reckon the U.S. can wobble around 1%-1.5% without falling over. The decline in the economy’s so-called stall speed is a relief after data released Tuesday signaled the weakest manufacturing…

NAIROBI (Capital Markets in Africa) – Kenya’s capital city Nairobi is being outperformed by semi-urban areas and smaller cities, such as Kiambu and Nakuru, according to data on regional economic activity. There’s some evidence to suggest this may become an emerging trend across Africa with a different pattern of urbanization providing the engine of growth. Nairobi had the weakest GDP per capita growth of all Kenya’s 47 counties. This chimes with World Bank research showing…

CAIRO (Capital Markets in Africa) – Egyptian stocks extended losses and dollar bonds fell after small but rare anti-government protests over the weekend. The EGX 30 dropped 1.5% on Monday, extending losses to 6.7% since rallies in several cities over the weekend evoked memories of the instability that followed the 2011 uprising and ouster of former President Hosni Mubarak. The country’s $1.75 billion of bonds due 2029 headed for the biggest decline in over a month as of 9:03…