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Friday, November 08,
2019 / 03:00PM / United Capital Research / Header Image
Credit: City Press
So far, the South African economy has remained
under pressure in 2019, amid faltering output growth, massive inequality,
rising unemployment, and power sector crisis. This remains a major concern for
investors, as the economic outlook for the country seems rather melancholic.
Despite President Cyril Ramaphosa's economic stimulus and recovery plan
launched in Sept 2018, Q1-19 annualized GDP growth sank to a new low since the
financial crisis, down in the negative region at -3.2%.
Recently, the South African rand and government
bonds surged after a renowned global rating agency, Moody's, kept the country's
investment grade credit rating, with South Africa's sovereign debt rating at
Baa3. However, the rating agency revised the outlook for the economy from 'stable' to 'negative', implying deterioration in economic growth and rising debt as
alarming issues. The negative outlook signifies that there is a cover of 12-18
months, in which a downgrade could be delivered. Nevertheless, Moody's made it
clear that a credible budget statement in Feb -2020 would be crucial in
maintaining the current rating.
In our opinion, South Africa must hasten the pace
of reforms, in order to strengthen investors' confidence, avoid massive
outflows of funds and the potential increase in costs of debts, should
investors price in these growing risks.
Top African Stories
S.Africa manufacturing,
business confidence falls take shine off investment drive: South Africa's
manufacturing contracted by more than expected and business confidence tumbled
in data released on Thursday, casting further doubt over the economy a day
after President Cyril Ramaphosa secured $24 billion of investment pledges. Read
more
Kenya's president
finalises removal of rate cap for banks: Kenya's President Uhuru Kenyatta has
signed a law that scraps a cap on banks' commercial lending rates which had
been blamed for stalling lending to businesses, his office said on
Thursday. Read
more
Ivory Coast seeks oil
majors as it opens oil & gas licensing round: Ivory Coast wants more
explorers for oil and gas as it seeks to boost economic growth, according to
Energy Minister Abdourahmane Cisse. Read
more
South Africa Makes
Headway in $100 Billion Investment Drive: South African President Cyril
Ramaphosa said his administration is on track to lure $100 billion in new
investment within five years, with more than $16 billion already committed and
many more projects in the pipeline. Read
more
Angola to name licensing
winners in April, new round in Jan: Angola expects to announce the winners of
its 2019 oil and gas licence auction round in April as part of a multi-year
plan to boost declining output, a senior executive at the National Agency of
Petroleum, Gas and Biofuels (ANPG) said on Thursday. Read
more
Central Bank Of Nigeria
Automates Nigerian Export Proceeds Form ("Form NXP") For Commercial
Exports: The Central Bank of Nigeria, pursuant to powers conferred on it by the
Foreign Exchange (Monitoring & Miscellaneous Provisions) Act, 1995 to issue
guidelines regulating export and import trade transactions in collaboration
with relevant governmental entities, issued a circular tagged Automation of
Form on the Trade Monitoring System. Read
more
Looking Forward
Angola
Oct-19 Consumer Price Index - November 12th
Oct-19 Net Reserves - November 17th
Ghana
Oct-19 Consumer Price Index - November 13th
Sep-19 M2 Money Supply YoY - November 17th
Kenya
Sep-19 Overseas Remittances - November 15th
Nov Benchmark Interest Rate - November 25th
Senegal
Oct-19 Consumer Price Index - November 15th
Morocco
Oct-19 Consumer Price Index - November 22nd
Oct-19 Money Supply M3 YoY - November 29th
Nigeria
Oct-19 Consumer Price Index - November 14th
Q3-19 GDP Report - November 25th
South Africa
Sep-19 Mining Production YoY- November 14th
Oct-19 Consumer Price Index - November 20th
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