Nigeria’s Spending Structure Unsustainable, Budget Head Says

Nigeria’s Spending Structure Unsustainable, Budget Head Says

LAGOS (Capital Markets in Africa) — Nigeria’s current trend of spending more money on running the government than on building new infrastructure is unsustainable, the country’s top budget oversight official said. Low revenue collection and high recurrent costs have resulted in actual capital expenditure below two trillion naira ($4.88 billion) a year for a decade, Ben Akabueze, director-general of the Budget Office, said Tuesday in a virtual presentation. “Hence, the investments required to bridge the infrastructure…

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Energy Sector Debt Is a Key Risk to Ghana’s Post-Pandemic Debt Trajectory

Energy Sector Debt Is a Key Risk to Ghana’s Post-Pandemic Debt Trajectory

ACCRA (Capital Markets in Africa) – Stable Outlook but Risks to Public Finances Fitch Ratings expects that Ghana’s general government debt will continue to rise in 2021 and 2022 due to high pandemic-related spending and the realisation of energy sector liabilities. In our base case, we expect debt to plateau at about 75% of GDP from 2024. Fitch affirmed Ghana’s sovereign rating (B/Stable) in October 2020, on an expectation of a gradual recovery, both in…

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IMF Lifts Global Growth Forecast, Warns of Diverging Rebound

IMF Lifts Global Growth Forecast, Warns of Diverging Rebound

LAGOS (Capital Markets in Africa) — The International Monetary Fund upgraded its global economic growth forecast for the second time in three months, while warning about widening inequality and a divergence between advanced and lesser-developed economies. The global economy will expand 6% this year, up from the 5.5% pace estimated in January, the IMF said in its World Economic Outlook published on Tuesday. That would be the most in four decades of data, coming after…

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Africa: Real GDP to grow by 3.4% in 2021, outlook subject to elevated uncertainties

Africa: Real GDP to grow by 3.4% in 2021, outlook subject to elevated uncertainties

LAGOS (Capital Markets in Africa) – The African Development Bank Group (AfDB) projected Africa’s real GDP to grow by 3.4% in 2021, after contracting by 2.1% in2020 due to the fallout from the coronavirus pandemic. It attributed the region’s economic recovery to the easing of pandemic related restrictions, the anticipated resumption of tourism activity, and the increase in commodity prices. It noted that the economic impact of the pandemic varies across economic groupings and sub-regions,…

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NIGERIA INSIGHT: Recovery Continues, But Economy Remains Fragile

NIGERIA INSIGHT: Recovery Continues, But Economy Remains Fragile

LAGOS (Capital Markets in Africa) — Nigeria has managed to get the virus under control, for now at least, enabling the government to lift most lockdown restrictions. This, together with easing OPEC production cuts, has supported a gradual pick-up in output. The recovery, however, remains fragile, with uncertainty around the vaccine rollout and ongoing foreign exchange restrictions posing downside risks. We now expect the economy to rebound 2.4% this year, with GDP growth expanding by…

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Oil Rises After Suez Canal Blockage, Strong European Data

Oil Rises After Suez Canal Blockage, Strong European Data

LAGOS (Capital Markets in Africa) — Oil rebounded, following a sell-off on Tuesday, as investors assessed the impact of a blockage in the Suez Canal and European manufacturing data beat expectations. Futures in New York added as much as 3.4% after a ship ran aground, giving the market a reprieve after prices sank to the lowest level since early February. Despite efforts to move the vessel, it could block the route for days, according to people…

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The Economy Looks Set to Roar, and That Worries Investors

The Economy Looks Set to Roar, and That Worries Investors

LAGOS (Capital Markets in Africa) — Before we talk about what’s going on in the stock market—and why it’s whipsawed so many investors even though the S&P 500 index is near a record high—we have to talk about bonds. U.S. Treasuries are probably the world’s most important financial market, but it’s easy to forget about them when they’re well-behaved. When prices suddenly drop, which causes their yields to rise, for many professional investors it can…

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