Africa Beat for the week ended 10 November 2017

By Alexander Forbes Investments on Nov 14, 2017 in General


Economic Update

Namibia – Weak credit extension growth

  • The Private sector credit extension (PSCE) growth moderated in September to 5.2% y-o-y from 5.9% y-o-y in August
  • According to the Bank of Namibia, this moderated PSCE growth was driven by weaker demand for credit by the corporate sector
  • Total credit extended to the corporate sector increased by 3.9% y-o-y in September, down from a 6.0% y-o-y increase in August
  •  In contrast, growth in credit extended to households remained steady at 6.4% y-o-y in September, unchanged from August

Mauritius – Inflation remains unchanged in October

  •  The Consumer Price Index (CPI) remained at 3.5% y-o-y in October, which is the same reading as in the previous month
  • On a monthly basis, CPI decreased by 0.4% in October, after falling by 0.9% in September
  •  The housing, water, electricity, gas & other fuels sub-index fell by 3.2% m-o-m and was the largest contributor to the m-o-m decrease in October
  • The food & non-alcoholic beverages and transport sub-indices saw a 0.5% m-o-m and 0.2% m-o-m decline in October respectively

Nigeria – Moody’s downgrades credit rating

  • On 7 November, Moody’s opted to downgrade Nigeria’s long-term issuer rating from “B1” to “B2” with the outlook remaining unchanged at stable
  •  Moody’s cite perceived fiscal weakness as being the reason for the downgrade
  • They highlight that “authorities’ efforts to address the key structural weakness exposed by the oil price shock by broadening the non-oil revenue base have so far proven largely unsuccessful.”
  • Furthermore, fiscal revenues have recorded close to a 50% decline over the 2014-16 period, and they believes Abuja’s public finances will remain weak over the medium term
  • The stable outlook currently reflects the agency’s view that the risk of a shock occurring that will expose Nigeria’s fiscal fragilities is low

Egypt – Disinflation picks up pace

  •  Amid a tight monetary policy stance and relatively stable currency, the rise in consumer prices slowed even further in October in line with expectations
  • The Central Bank of Egypt reported that CPI moderated to 30.8% y-o-y in October, down from 31.6% y-o-y in September
  •  Moreover, core price inflation eased to 30.5% y-o-y in October, compared to 33.3% y-o-y in September

General News

Morocco – International Monetary Fund (IMF) completes Article IV Consultation

  • The IMF indicated that Morocco has benefited from its commitment to prudent macroeconomic policies and structural reforms
  • They highlighted that economic growth prospects have improved, while fiscal and external vulnerabilities have reducedThe IMF further mentioned that there remains work to be done to achieve higher and more sustainable economic growth and noting that the following areas should be improved:
  • the quality of the education system
  • functioning of the labour market
  • female labour force participation
  • efforts of the business environment

Zimbabwe- Mnangagwa expelled from Zanu-PF after being accused of witchcraft

  •  On 6 November, Emmerson Mnangagwa, former Zanu-PF vice president, was sacked by Zimbabwe president, Robert Mugabe
  • The 93-year-old Mugabe accused Mnangagwa of consulting witchdoctors and prophets as part of a campaign to secure the presidency
  •  Mugabe added that Mnangagwa had made the same mistakes as Joice Mujuru, who was the president’s deputy for 10 years until she was fired in 2014
  • Furthermore, he said Zanu-PF will look to discipline Mnangagwa’s co-conspirators
  • According to Mnangagwa, his sudden departure from the country was caused by continuous threats on his life and family through various forms including poisoning
  • Click here >>

Companies Expanding In The Rest Of Africa

Ethiopian – Airlines to link Buenos Aires, Argentina with Africa

  • Ethiopian Airlines has finalized preparations to start five weekly flights to Buenos Aires, Argentina, as of 8 March 2018
  • Buenos Aires is the world’s capital of Tango which is home of centurion old buildings and a vibrant cultural scene
  • Argentina is one of the largest economies in Latin America and  Buenos Aires is the second largest city in South America with a population of over 13 million
  • This new link will provide efficient connections to their network in Asia, the Middle East, and Africa
  • Click here >>

Domestic Unrest

Tanzania – Hand grenade kills six children

  • On 15 November, six children died after picking up a hand grenade they found while walking to school
  • Fifteen other children were injured in the blast in the Kagera region, near the Burundi border
  • According to the regional police commander, one of the pupil picked up the bomb mistaking it for scrap metal with the intention to sell it to buy exercise books
  • Click here >>

Sources: NKC, African business communities, IOL

Alexander Forbes Investments

Alexander Forbes Investments

Alexander Forbes Investments was established in 1997. We are a forward-thinking and trusted global investment provider, with roots in Africa. In pursuit of certainty we set out to understand our retail and institutional clients’ circumstances and risk tolerance to set clear goals. Our adaptive investment approach, called Living*Investing allows us to maximise opportunity and minimise risk at every stage of the investment cycle.

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