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Macro Africa

24 Apr 2019   Macro, Policy, Africa

Ethiopia: The Next African Frontier?

Since coming to power in April 2018, Abiy Ahmed Ali has set Ethiopia upon a new path towards liberalisation. Seeking to temper the established model of state-led growth, Abiy has sought to boost the economy through massive investment in infrastructure and manufacturing, as well as a sweeping programme of privatisation. But so far these policies have yet to bear fruit, and the spectre of political instability threatens to stall the reform process.

COUNTRY PROFILE: Rwanda Offers Africa a Role Model for Pro-Market Reforms

In spite of its troubled past, Rwanda’s impressive post-civil war progress in opening up its markets and establishing a strong business-friendly governance mode have largely gone under the radar. That is starting to change, and its neighbours are beginning to take heed.

SWOT: As Liquidity Tightens, East African Borrowers Turn to DFIs, ECAs, and Short-Term Funding

Following a recent research trip to the region and conversations with bankers and investors on the ground, Bonds & Loans put together a summary of key strengths, weaknesses, opportunities and threats East African economies are set to face over the next 12 months.

Viscous Fiscus: In Pursuit of Reform, South Africa Takes One Step Forward, One Step Back

Markets have hung their hopes on the upcoming 2019 election and the avoidance of a blowout at troubled state-owned utility Eskom as potential reasons for optimism in South Africa, but without a monumental shift in mindset, or an end to the factionalism that has increasingly defined the executive and the ANC, both reform and growth will remain elusive.

Eurasia Group: Balance Between Diversification and Fiscal Consolidation Key for Southern Africa

Sub-Saharan Africa has progressed in strides over the past two decades, but rapid debt accumulation, political instability and impact of global market volatility has led to souring near-term sentiment on the region. Bonds & Loans discussed these and other topics with Darias Jonker, Director for Southern Africa at the Eurasia Group.

Brown Brothers Harriman: Emerging Markets Preview for the Week Ahead

EM FX ended the week on a soft note, as the dollar remains resilient. While a softer US interest rate outlook benefits EM, we think this is offset by the deteriorating global growth outlook. The IMF will release its updated World Economic Outlook Monday, which is likely to highlight the growing downside risks.

S&P Global: From Rwanda to South Africa, External Risks Trump Idiosyncratic Challenges

Gardner Rusike, Sovereign Analyst at S&P Global, offers a brief outlook assessment of Africa’s largest markets and examines the challenges and opportunities facing the continent in 2019.

Gabon: Political Turmoil Delays Essential Hydrocarbons Code Revision

As Gabon is the fifth largest oil producer in sub-Saharan Africa, the health of its economy is tied to its hydrocarbons industry. But since the 2014 oil crash, the legislation currently governing the sector has been wholly unsuitable. Now, the government is hoping to woo international oil companies (IOCs) by revising the code; but the President’s recent illness, along with a failed coup attempt this week, are halting legislative progress, and the industry’s prospects in the African country remain hazy.

Emerging Markets in 2019: What’s in Store for The Asset Class?

This year was not particularly forgiving for emerging market assets. Rising US interest rates and a strengthening US dollar coupled with a wider shift from quantitative easing to tightening led to broad-based repricing across the investment landscape. It was also a year that saw political and policy uncertainty, trade wars, and commodity and asset price volatility weigh heavily on market activity. What does 2019 have in store? Bonds & Loans speaks with investors to get a sense of what keeps them up at night when thinking about the year ahead, and takes a look at some of the top themes likely to dominate the EM credit landscape in 2019.

Nigerian Credit Sees Strong Demand but Election, Oil, Fiscal Metrics Weigh on Growth Outlook

Moving forward with plans to swap its debt from local currency into dollars, Nigeria’s Federal Government successfully placed close to USD3bn in international bond markets through a widely subscribed issuance in November that saw roughly three times that amount in demand from investors. But analysts are concerned that a confluence of factors – declining oil prices, persistently poor revenue generation, slowness to reform and an increasingly volatile political environment – could arrest the optimism and capital markets momentum generated by the sale.


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