Economy

CAIRO (Capital Markets in Africa) — Egyptian inflation slowed for a second month, giving the central bank more leeway to make its first interest-rate cut since November. Consumer prices in urban parts of Egypt grew an annual 4.3% in January, compared with 5.4% in December, the state-run statistics agency CAPMAS said Wednesday. The slowdown was driven by a decline in food and beverage prices, the single largest component of the inflation basket, which dropped 0.5%…

LAGOS (Capital Markets in Africa) — The Central Bank of Nigeria is likely to keep rates on hold on today as it bids to support the recovery amid the second wave of Covid-19 infections. Inflation is surging, but policymakers view the above-target rate as unavoidable, with supply bottlenecks being amplified by the pandemic. The rate decision is expected at 1 p.m. London time. Activity in Nigeria has shown signs of improvement since the gradual opening…

JOHANNESBURG (Capital Markets in Africa) — In 2020, emerging market debt rocketed higher. Has necessary pandemic stimulus planted the seeds of future fiscal crisis? Bloomberg Economics’ analysis shows South Africa is vulnerable but Brazil, India, Indonesia, Mexico, and Russia are less exposed. Persistently low-interest rates partially offset the impact of higher borrowing. An increase in interest rates would raise the pressure, but from current low levels, the impact is likely manageable. Most of the debt…

NAIROBI (Capital Markets in Africa) — Kenya’s economy is expected to expand this year as activity resumes following Covid-19 lockdowns, boosting tax revenue and government spending. East Africa’s largest economy will probably expand 6.4% this year and growth will slow to 5.5% in 2022, with scheduled elections likely to dampen activity, Treasury said in a report on its website. The Treasury estimates that gross domestic product increased 0.6% in 2020, which would make it one…

LUSAKA (Capital Markets in Africa) — Zambia’s move this month to further subsidize fuel prices highlights the government’s balancing act of seeking to retain power while convincing the International Monetary Fund to approve a bailout before an election scheduled for August. The finance ministry removed a 16% value-added tax on gasoline and diesel prices from Jan. 1, which it said was necessary to avoid increases at the pump. The IMF opposes subsidies and that could…

ACCRA (Capital Markets in Africa) — Ghana’s economy contracted for a second straight quarter in the three months through September, even as the government eased restrictions imposed to curb the spread of the coronavirus pandemic. Gross domestic product declined 1.1% in the third quarter from a year earlier, government statistician Samuel Kobina Annim told reporters Wednesday in the capital, Accra. That compares with a contraction of 3.2% in the second quarter. The data may put…