Africa: Positive news from unlikely sources

LAGOS (Capital Markets in Africa) – Some good news from two African countries that have come to epitomise the continent’s fiscal struggles. A breakthrough regarding Zambian debt discussions is reportedly not too far away. Next month could see the signing of a Memorandum of Understanding with official creditors, which would effectively untie the IMF’s hands and allow the Fund to finally provide support. In Ghana, the Q4 2022 GDP release came in much better than expected. Strong performances in ICT and mining have changed the 2022 annual growth outturn from miserable to mediocre. Progress on Ghanaian debt discussions would be cause for optimism.

Africa: Severe hunger crisis in the Sahel
The World Food Programme (WFP) issued a news release on food insecurity in West and Central Africa on Tuesday, April 18. The hunger crisis the release describes is shocking in its immensity: tens of millions of people face some degree of food insecurity, and tens of thousands are affected by “catastrophic” hunger. The food crisis drives conflict and migration, with effects on most of Africa and beyond.

Ghana: Economic activity was better than expected in Q4
The signs of the economy’s struggles have cemented themselves, as national accounts data from the Ghana Statistical Service (GSS) showed that economic growth decelerated to 3.1% in 2022; down from 5.1% in 2021. This comes after data from the stats agency showed that economic growth was recorded at 3.7% y/y in Q4. We forecast economic activity to slow even further this year.

Zambia: Official creditors inching closer to MoU on debt relief
Media reports stoked optimism that official creditors may sign a Memorandum of Understanding (MoU) in May following fruitful discussions earlier this week. A debt relief agreement between official creditors which is in line with IMF targets will place Zambia on course to access further financial support from the Fund.

Source: Oxford Economics Research