Economy

JOHANNESBURG (Capital Markets in Africa)  – Lesetja Kganyago, then the top official at South Africa’s Treasury, was taking a break at Sugarloaf Mountain in Rio de Janeiro between two G-20 meetings in November 2008 when he got the bad news. Barely three years after his country had managed to get its highest-ever investment-grade ratings from two of the three main credit-rating companies, the global financial crisis was threatening to reverse that progress. South Africa was…

ADDIS ABABA (Capital Markets in Africa) – Ethiopia plans to increase 2019-20 spending by 1.6% to fund projects that will help boost the Horn of Africa country’s economic expansion. Spending plans for the year starting July will expand to 386.9 billion birr ($13.4 billion), Ethiopian Finance Minister Ahmed Shide said in a recording of parliament proceedings aired on ruling party-controlled Fana Television. That will probably help the economy grow by 9%, according to Shide. Ethiopia, which the International…

LAGOS (Capital Markets in Africa) – Central banks in Kenya and Ghana are likely to keep interest rates on hold next week following in the foot steps of their larger peers in South Africa and Nigeria. Angola’s central bank is also set to leave interest rates alone as it aims to slow inflation even as it lets the currency weaken. Nigeria kept its key rate unchanged at 13.5% on May 21 and the South African…

LUSAKA (Capital Markets in Africa) – Moody’s Investors Service has cut its assessment of Zambia’s debt deep into junk territory citing a rising probability of default. Moody’s downgraded the southern African nation’s long-term foreign-debt rating to Caa2 — the fourth-lowest junk assessment — from Caa1 and reduced the outlook to negative, it said in an emailed statement Thursday. The higher risk of a default “reflects increasing credit challenges stemming from rising debt levels,” exacerbated by…

LAGOS (Capital Markets in Africa) – Central banks in sub-Saharan Africa’s largest economies could start diverging on policy when they make interest-rate calls in the next two weeks after oil prices pushed up inflation. Since the Monetary Policy Committees last met, inflation in Ghana and Kenya accelerated and analysts flagged that the South African economy probably contracted in the first quarter. Oil is adding to cost pressures and countering the positive effects of portfolio inflows and the support to…

LAGOS (Capital Markets in Africa) – Nigerian inflation accelerated in April as food-price growth quickened. Consumer prices in Africa’s largest oil producer rose 11.4% from a year earlier, compared with 11.3% in March, the Abuja-based National Bureau of Statistics said in a report published Wednesday on Twitter. Prices rose 0.94% in the month. The pick-up in inflation could limit the room for the central bank to loosen policy further when it decides on interest rates…

JOHANNESBURG (Capital Markets in Africa) – South African President Cyril Ramaphosa’s triumph in guiding his African National Congress to a sixth straight election victory has left him with an even more formidable challenge: to pick a cabinet that can dismantle a shadow state of corruption and revive the flagging economy. His window of opportunity to install an administration free of ministers tainted by graft and to impose tough economic reforms, without deepening rifts in an already-divided…