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Friday, January 31, 2020 / 3:00 PM / United Capital
Research / Header Image Credit: BMI
The fiscal narratives
across Sub Saharan Africa (SSA) region in 2019 was broadly similar, as fiscal
deficit widened, owing to shortfalls in actual revenue generation amid rising
expenditures. Thus, to cater for the rising recurrent spending and spur economic
activities, public debt levels stayed elevated in 2019. More countries
continued to tap into the international debt capital market without necessarily
neglecting funds from traditional concessional sources. Notably, Benin was the "new kid on the block" as the West African country issued its debut sovereign
Eurobond in H1-19 while the DRC received its first IMF lending since 2012, in
H2-19.
In 2020, the borrowing
spree is expected to pick as we anticipate a wider fiscal deficit - spurred by
continued rise in overall expenditures during the period. Specifically, we
expect the implementation of an upward review of national minimum wage to add
further pressure on Nigeria and Ghana's government financing needs. Also, we
expect the currently low interest rates environment in the developed market to
spur commercial borrowings by SSA countries. However, the increased magnitude
of market-based borrowings has a higher risk content, as captured by greater
vulnerability to commodity prices, global interest rates, and currency
movements.
Accordingly, to make these
external borrowings sustainable, we expect government to implement policies and
reforms that could build resilience to these risks and use foreign capital to
raise medium-term potential growth.
Top African Stories
Looking
Forward
Angola
Jan-20
CPI YoY - February 9th
Ghana
Dec-19 Gross Reserves - February 4th
Jan–
20 CPI YoY - February 12th
Kenya
Dec-19
Overseas Remittances YoY - February 10th-17th
Jan-19
Inflation Rate - January 31st
Morocco
Q4-19
unemployment rate - February 7th
Nigeria
Jan-20
Markit/Stanbic IBTC Bank PMI - Feb. 5th
South Africa
Jan-20
Gross Reserves - February 7th
Q4-19
South Africa Unemployment - Feb. 11th
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