Africa Beat for the week ended 24 November 2017

By Alexander Forbes Investments on Nov 28, 2017 in General


Economic Update

Namibia – Fitch downgrades sovereign credit rating to ‘junk’ status

  • Fitch Ratings announced its decision to downgrade Namibia’s long-term foreign currency credit rating to sub-investment grade
  • It is the second major credit rating agency to do so in three months
  • Fitch downgraded Namibia’s sovereign credit rating from “BBB-” to “BB+” (one notch below investment grade)
  • The downgrade reflects weaker-than-forecast fiscal outcomes and projection that public debt-to-GDP will continue to rise over the medium term
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Nigeria – MPC keeps rates unchanged

  • The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) concluded its final session of the year
  • The MPC decided to maintain the Monetary Policy Rate (MPR) at 14.0%, while also retaining the cash reserve requirement (CRR) ratio at 22.5% and the liquidity ratio at 30.0%
  • The committee highlighted that, the most recent GDP numbers indicate that, the economic recovery remains fairly fragile with the main growth drivers pertaining to solid agricultural performance and an increase in oil production 

Zambia – Monetary policy easing resumes

  • The MPC of the Bank of Zambia took advantage of recent disinflationary trends to resume their policy easing cycle
  • They decided to cut the policy rate by 75 bps to 10.25%, which is the fourth cut of the year
  • Concerns about the prevailing low growth environment, risks to the stability of the financial sector and the high cost of credit were cited by the MPC

Egypt – Central Bank leaves interest rates unchanged

  • The Central Bank of Egypt’s (CBE) MPC decided to leave interest rates unchanged
  • The discount and seven-day repo rates were both maintained at 19.25%, while the overnight deposit and lending rates remained at 18.75% and 19.75%, respectively
  • The decision comes after an easing of inflation during August to October, specifically, consumer price inflation which moderated to 30.8% y-o-y in October, after peaking at 33.0% y-o-y in July when energy prices were increased

Mozambique – Disinflation continued in October

  • The National Institute of Statistics (INE) recently released October’s consumer price index (CPI) data
  • According to the INE, CPI inflation was recorded at 8.35% y-o-y in October compared to 10.76% y-o-y in September
  • October’s drop in the inflation rate was the seventh consecutive month in which inflation fell, and the overall CPI inflation rate has now fallen by a cumulative 12.91% since April 2017

Morocco – Inflation ticks slightly upwards, but remains low and stable

  • CPI inflation accelerated for the third consecutive month in October 2017
  • According to data from the High Planning Commission (HCP), CPI inflation increased to 0.6% y-o-y in October, up from 0.4% y-o-y in the previous month
  • This was largely attributed to a slower decline in food prices, which represents just over 41% of the weighting used to calculate the consumer price basket
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General News

Zimbabwe – Former finance minister, Ignatius Chombo, faces corruption charges

  • Former Zimbabwe finance minister Ignatius Chombo, who was among those that were detained by the military before Robert Mugabe resigned as president, was arrested
  • The state prosecutor said Chombo was charged three counts of corruption, including attempting to defraud the Zimbabwean central bank in 2004, when he was a local government minister
  •  The court ordered that Chombo be detained until 27 November 2017 when his bail application will be hear
  • Click here >>

Domestic Unrest

Egypt – Islamic State raises stakes with Egypt mosque attack

  • At least 305 people died in the assault, which was launched during Friday’s prayer at the mosque in Egypt’s North Sinai
  • Egypt’s public prosecutor said there were about 30 attackers at the scene
  • President Abdul Fattah al-Sisi has vowed to respond with “the utmost force”
  • The Egyptian military says it has already conducted air strikes on “terrorist” targets
  • Click here >>

Sources: NKC, Reuters, BBC, Trading economics

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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