Sept 2016 |

Currency Devaluation, Where Are the Opportunities?

LAGOS, Nigeria, Capital Markets in Africa: Some African countries that are considered great investment opportunities have recently seen currency devaluations. Whilst this could be seen as a challenge for their economies, it could also create an opportunity for African manufacturers. Import substitution has been a significant part of Africa’s economic growth during the preceding decade, as seen, for example, by Nigerian based Dangote Group, currently manufacturing cement, sugar and flour. All of these items were…

Q & A Session: African Economic Review and Outlook

Posted on by The Editorial Team

CMnAfrica: Retrospectively, in your opinion, what are the significant changes you noticed in African economies during the first half of 2016? GADIO SAMIR: Market sentiment towards emerging markets and Sub-Saharan Africa was initially poor in early H1-2016. The oil price fell to new lows in Q1 which reinforced this bearish bias. African Eurobond valuations widened to record highs while foreign interest in local markets was rather subdued. However, risk conditions improved from mid-Q1 and even…

South Africa’s Economy Diagnosis: Welcome To Stall Speed

Posted on by The Editorial Team

LAGOS (Capital Markets in Africa) – Growth in South Africa is likely to hit stall speed in 2016, at a barely positive 0.3%Y, by our estimates. Yet even as a Brexit-induced global growth shock further complicates the outlook, we see currency prospects as less concerning. The SARB is on hold for the foreseeable future, in our view. A revised GDP data series combined with our views of economic stagnation in several developed markets in 2017…

Nigeria: Policy Action in a Time of Stagflation

Posted on by The Editorial Team

LAGOS, Nigeria, Capital Markets in Africa: The Nigerian economy is currently between a rock and a hard place as policymakers grapple with stagflation i.e. the simultaneous emergence of negative economic growth and high inflation. Inflation has accelerated in 2016, outstripping all expectations to hit a decade-long high of 16.5% in June. GDP growth, meanwhile, turned negative in the first quarter of the year as the economy contracted by 0.36% year-on-year. With a recession looming, the…

Angola: Funding the Budget Deficit Amidst the Oil Price Slump

Posted on by The Editorial Team

LAGOS, Nigeria, Capital Markets in Africa: Government revises macro scenario for 2016 Economic activity in Angola has slowed considerably in recent years. Real GDP advanced by only 4.8% in 2014 (from 6.8% in the previous year) and 3% in 2015. This is considerably slower than the 10.4% average recorded in the previous decade. The deceleration was particularly reflected in the oil sector, which saw a contraction in activity in 2014 after a strong decline in…

CÔTE D’IVOIRE: ECONOMIC REVIEW AND OUTLOOK

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LAGOS, Nigeria, Capital Markets in Africa: Côte d’Ivoire’s fundamentals to remain strong but growing external headwinds pose downside risks Growth to remain strong over the short term, providing businesses with opportunities Côte d’Ivoire’s short-term economic outlook appears good, reflecting successful reforms under the current administration. The country has come a long way from five years of civil war (2002-07) that damaged its infrastructure, and post-election instability in 2010 that left 3,000 people dead and thousands…

Raising Capital to Balance Budget Deficits in Uganda: Issues, Options and Strategies

Posted on by The Editorial Team

LAGOS, Nigeria, Capital Markets in Africa: Uganda’s fiscal deficit has widened sharply in the recent past increasing from 2.5 percent of GDP in 2011/12 to 6.2 percent of GDP in 2015/16 driven mainly by an increase in public investment in infrastructure, in particular roads and hydropower projects. At the same time, due to the global financial and economic crisis of 2008, foreign aid to developing economies like Uganda declined significantly as advanced economies adopted austerity…

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