Monetary Policy In Africa: Singing A Global Chorus?

Proshare

Friday, September 13, 2019   / 03:00PM / United Capital Research / Header Image Credit: Central Banking

 

For the better part of 2019, trends in global monetary policy are tilting increasingly towards an accommodative stance. Clearly, monetary authorities are quantifying the impact of geopolitical tensions, trade disputes and an imminent global recession.

Recently, the European Central Bank (ECB) bowed to pressures of a consistently weak EU growth, cutting its deposit rate to -0.5%, from -0.4% and resuming quantitative easing measures. As the world economy comes to terms with the regime of increasing dovish actions, emerging markets are caught between two major choices, join the easing bandwagon to stimulate growth, or keep interest rates high to attract foreign capital.

In the last two months, Central Banks across the major African economies seem to have chosen the former option, using the opportunity to address growth challenges and reduce the burden of high debt servicing cost. Notably, while Nigeria decided to keep its key policy rate unchanged at the Jul-19 meeting, its fellow economic giants, South Africa and Egypt slashed rates by 25bps and 150bps respectively. Also, other economies such as Botswana (-25bps), Mozambique (-50bps), Namibia (-25bps) and Mauritius (-15bps) followed by cutting policy rates.

Yet, the role of fiscal stimulus cannot be overemphasized. Without policy reforms to address infrastructural deficits, spur consumer spending, driving value-added production and manufacturing, the use of only monetary policy will be ineffective – like driving a car with no steering.

 

Top African Stories

  • Zimbabwe opens tender for 235MW of solar power projects: The Infrastructure Development Bank of Zimbabwe has issued a request for proposal to seek partners for the development and construction of seven solar parks, with a combined generation capacity of 235 MW, plus two mini-hydro power projects. Read more
  • Nigeria plans VAT increase in push to raise non-oil revenues: Nigeria plans to increase value-added tax on goods, the finance minister said, as Africa's biggest oil exporter seeks to reduce its reliance on crude sales. Read more
  • Cameroon discovers 300 mining sites: Cameroon has discovered 300 new mineral mines across the ten regions of this Central African nation. Sapphire, zinc, rare earth, uranium, nickel and manganese are among the rich minerals discovered in a project funded by the World Bank. Read more
  • Nigerians repatriated from South Africa after attacks: Nigeria began repatriating more than 600 of its citizens from South Africa following a wave of deadly xenophobic attacks that frayed relations among neighboring nations. Read more
  • Somaliland seeks investors: Somaliland is seeking investors to boost trade and ultimately the local economy. The semi-desert territory on the Coast of the Gulf of Aden, declared its independence from Somalia in 1991. It is a main livestock exporter. Read more

 

Looking Forward

Egypt

Jun-19 Production Index MoM - September 20th

Jul-19 Trade Balance -  September 18th

 

Ghana

Q2-19 GDP YoY - September 18th 

Aug-19 CPI YoY - September 18th 

 

Senegal

Aug-19 GDP QoQ - September 23rd 

 

Mauritius

Policy Rate Decision - September 29th

Q2-19 GVA YoY - September 30th

 

Morocco

Policy Rate Decision - September 24th

Aug-19 CPI YoY -  September 20th

 

Rwanda

Q2-19 GDP YoY - September 22nd

 

South Africa

Aug-19 CPI YoY- September 18th

Jul-19 Retail Sales Constant YoY - September 18th

  

Visit African Markets in Proshare MARKETS

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

 


Related News

    1. Kenya Lending Rate Cap Weighs on Bank Earnings and Loan Growth
    2. Nigeria-South Africa; Trade Not Xenophobia, A Handshake Across the Sub-Sahara
    3. Annual GDP Growth Falling in Virtually All Large Economies
    4. Zambia's Inflation Rate: A Justifiable Outcry For Policy Intervention
    5. Global Economy Continues to Walk on Eggshells, Sentiments Remain Tepid
    6. UK Politics to Remain Volatile; No-Deal Risk Rises
    7. Sub-Sahara African Currencies Outlook in H2-19:...to mirror H1-19?
    8. Fed Will Only Cut Rates Once in 2019 - Fitch
    9. Frontier Economies See Lower Interest Rates
    10. In the Footsteps of Nigeria, South Africa Reappoints Apex Bank Governor
    11. Bank of England Publishes July 2019 Financial Stability Report
    12. Turkey Ousts Central Bank Chief Who Drew Ire for Holding Rates
    13. Is the West Africa Single Currency Ambition Feasible?
    14. The Sub-Saharan Africa Region
    15. Kenya joins the Group of Oil Producing Countries in Africa
    16. Moody's Downgrades the Democratic Republic of Congo's Rating to Caa1
    17. Remarks By President Donald Tusk After The Euro Summit Meeting On 21 June 2019
    18. South Africa's Q1-19 GDP Result: On the Way to Another Recession?
    19. Togo Gets S and P's 'B and B' Rating: To Join The Eurobond Bandwagon?
    20. South Africa's Rand Continues To Tumble On Central Bank Worries

    Proshare Nigeria Pvt. Ltd.

    Proshare Nigeria Pvt. Ltd.

    READ MORE:
    Related News
    SCROLL TO TOP