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



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- Moody's Downgrades the
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- Remarks By President Donald Tusk
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- South Africa's Q1-19 GDP Result:
On the Way to Another Recession?
- Togo Gets S and P's 'B and B' Rating: To Join The Eurobond Bandwagon?
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