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Nigeria Up - South Africa Down


Today's July manufacturing PMI releases provided more evidence that the economies of Nigeria and South Africa are heading in different directions.

South Africa's ABSA PMI tumbled to 42.9 from 46.7 in June signalling that the manufacturing contraction intensified last month. This was also the sharpest decline since August of 2009 when the nation was subject to the fallout from the 2000-09 downturn in its key European and US export markets. The Rand last 0.77% against the USD falling to 13.27.

On the other hand, the pace of expansion across Nigeria's manufacturing sector picked up for the fourth consecutive month to 54.1 from 52.9 in June. The case for Nigeria escaping recession in Q2 was further strengthened by the non-manufacturing PMI which edged up to 54.4 in July from 54.2 in the previous month. According to the index the non-manufacturing sector has been expanding for three successive months.

The upshot of these results is that both central banks are likely to trim the policy rate over the next few months.

Elsewhere, producer price inflation in Angola softened to 27.39% y/y in June from 29.34% in May. This is its lowest print since September 2016 and provides some reassurance that the recent slide in the headline rate from 41.12% in December to 30.51% in June is likely to continue.

Seychelles saw its trade deficit ease to 43.3m USD in June, down 45.1m in May.

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