Economy | - Part 73

South Africa’s Growth Downside Amid Credit Outlook says S&P

JOHANNESBURG, South Africa, Capital Markets in Africa — Standard & Poor’s halved its 2016 growth forecast for South Africa as it warned that pressure on the nation’s credit rating comes mainly from a slow economic expansion. The rating company cut its growth forecast for this year to 0.8 percent, in line with that of the central bank, from 1.6 percent, and reduced its estimate for 2017 to 1.8 percent from 2.1 percent, according to an e-mailed statement…

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

Posted on by The Editorial Team

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…

Mozambique Rating Downgrade by S&P, Moody’s on Debt Swap

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MAPUTO, Mozambique, Capital Markets in Africa — Mozambique’s credit rating was downgraded by Standard & Poor’s and Moody’s Investors Service because a proposed restructuring of about $700 million of bonds issued by a state-owned Tuna-fishing company could be equivalent to a default, according to the firms. S&P’s rating for the south-east African nation was lowered to CC, 10 levels below investment grade, from B-, the company said in a press statement released on Tuesday. While Moody’s…

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…

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