March 13, 2025 • 15 mins
Two budgets on different sides of the continent this week show the struggle African countries are facing when it comes to growing their economies. In Ghana, the new administration promised 10% spending cuts plus a higher tax on gold revenue, and in South Africa the much-delayed budget -- and its VAT hike -- still needs to find a way through parliament. With the global economy dealing with multiple conflicts and a chaotic trade war, what’s the outlook for growth in Africa in 2025? Jennifer Zabasajja sits down with Bloomberg Economics Africa Economist Yvonne Mhango to break down the headlines from these key budgets and find out what the global turmoil means for Africa.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
Ghana and South Africa both delivered budgets this week against
a backdrop of a struggling global economy.
Speaker 3 (00:16):
The state of our economy is troubling, but we will
fix it. It will require some sacrifices, truthfulness, transparency and
discipline to.
Speaker 4 (00:28):
Raise the revel you needed. The government proposes to increase
evetererate by half a percentage point in twenty five twenty
six and by another half a percent a point in
the following year.
Speaker 2 (00:44):
Both countries have big holes in their budgets to fill.
But will the spending cuts and tax rises be enough
and will the public accept them?
Speaker 1 (00:52):
So the democratic Allians will not be supporting the budget
in its current form and therefore the budget being table
to does not have a parliamentary majority.
Speaker 2 (00:59):
On today podcast, we'll look at what these big economies
on two sides of the continent tell us about Africa's
growth story in twenty twenty five. I'm Jennifer Zabasaja and
this is the Next Africa Podcast, bringing you one story
each week from the continent driving the future of global
growth with the context only Bloomberg can provide. Joining us
(01:24):
today is Bloomberg Economics Africa Economists.
Speaker 5 (01:27):
That's von Mango Evon. Thanks so much for being here.
Speaker 2 (01:30):
We haven't had you on the podcast, so appreciate you
making the time.
Speaker 5 (01:33):
Let's just start with Ghana.
Speaker 2 (01:35):
This is the first budget for the new Mohamma administration.
What was Finance Minister Cassio Atto Forsen faced with when
putting his plans together and did he achieve that?
Speaker 1 (01:47):
So the challenge of the John Muhamma administration which has
just come into office is that they've inherited a fiscal miss,
essentially the inherited in economy with high inflation deficits that
will wider than anticipation and they're going to have to
correct this. Their plan is quite ambitious. Their plan to
turn the primary deficit of three point nine percent into
(02:08):
a surplus of one point five percent of GDP this year.
That's quite a significant physical adjustment and will require some sacrifices.
Speaker 2 (02:17):
How realistic is that considering the situation that Gama is
in right now.
Speaker 1 (02:22):
So our primary view is they may all likely miss
that because as I mentioned, that's quite a significant fiscal adjustment.
It requires a significant cut in spending, which they have
pledged to do. As well as a significant increase on
the revenue front. On the revenue side, they've increased levees
to the mining sector and taking advantage of the higher
goal prices, so they'll get income through there. And on
(02:46):
the spending side, yes, I think about a tenth of
the budget in terms of cuts will take places here.
But given that some spending can be and anticipated, you're
likely to see the mess that particular target.
Speaker 5 (02:58):
So what is the target that economics is expecting.
Speaker 1 (03:02):
We expect there to be a small primary deficit or
at least close to zero on the primary deficit side,
would it still be a significant improvement from a deficit
that was around four percent of GDP? In order to
arrest that increase in public debt, you need a primary
surplus and that's what this administration is trying to achieve.
So the goals are commendable, but it will probably take
(03:25):
them longer to achieve them than they're currently suggesting.
Speaker 2 (03:29):
How much do you think gold could potentially be a
contributor to that surplus that the government is trying to achieve.
We are seeing record prices for gold you mentioned mining.
How much could that really move the need of for them?
Speaker 1 (03:43):
Well, it's an important contributor, considering it's one of their
biggest exports, also in this time when prices are quite
significantly high. However, it is not the only driver of revenue.
You need revenue to be performing well in other parts
of the economy. Wouldn't lean too much on the gold
sector getting them out of this fiscal mess that they're in.
Speaker 2 (04:05):
Everyone what's Bloomberg economics expectation for the CD because a
lot of focus is being paid to currencies across the
continent right now.
Speaker 1 (04:12):
So the sceity is likely to continue to come under pressure.
Keep in mind, though they've been successful at restructuring their
debt domestically, they're still haven't got complete access to international
capital marketers yet, so that restrains how much foreign capital
can flow into the country, which implies the currency will
(04:32):
likely continue to come under pressure as they go through
this fiscal consolidation plan.
Speaker 2 (04:37):
So the country is not necessarily out of the woods
yet this new administration.
Speaker 1 (04:41):
Oh not as yet. Of course, the big hurdle has
been jumped, which is debt restructuring, which is a big positive.
But this administration, as they've said themselves, have a big
job to do in terms of correcting the fiscal challenges
that they found. We do think that if they remain
on this path, by the time they reached the end
of their four year term, we should begin to see
(05:04):
a turnaround on the fiscal front and that should begin
to reflect in a much more stable currency and lower inflation.
Speaker 2 (05:11):
Okay, so somewhat positive there for at least this new administration.
Speaker 5 (05:15):
That's only a few months in. Let's turn to South Africa.
Speaker 2 (05:19):
It's also the first budget for this new g and
U coalition government. A lot of different views on the
budget that we got on Wednesday. Talk to us about
your assessment of what was presented.
Speaker 1 (05:32):
Okay, So, as you saw, the budget was delayed by
three weeks and the main reason is the two big
parties in the ruling coalition government disagreed on the VAT increase.
What we did see is a compromise. Instead of a
two percentage point increase in that to seventeen percent, this
new budget proposes fifty basis points hike over the course
(05:55):
of two years, so essentially a percentage point over the
course of two years. So that's a compromise. However, we
are noting that this may not be enough for the
Democratic Alliance to vote for the passage of the budget.
They'd like to see more, in particular proposals that will
expedite growth. I think one of the big challenges So
Africa faces, and we do agree at Bloomberg Economics, is
(06:17):
that So Africa is a growth problem. It's why the
budget persistently misses its revenue targets. That's why there's pressure
on them to use tax policy to increase revenue. However,
on the spending side, more needs to be done, particular
cutting inefficient spending, and that's something the Democratic Alliance is
pushing for. So we are going to see over the
next coming weeks parties within the coalition meeting to discuss
(06:41):
concessions that the NC may need to make in order
to get the likes of the Democratic Alliance to vote
for a budget.
Speaker 2 (06:48):
I've also been struck evon by a lot of the
discussion around tax collection here in South Africa and how
the ideology around that potentially needs to change in the government.
Do you think it's the inefficient way to collect revenue?
Is it what South Africa needs right now, this economy needs.
Speaker 1 (07:07):
I think the Soufric Revenue Service has actually done a
much better job of tax collection in recent years, particularly
under Edward Kristwitter, who was appointed I think about four
years ago, so that has improved. Of course, there's more
that can be done there those that are evading taxes.
I think one of the positives of this budget is
that the allocation to the revenue Authority has been increased
(07:27):
so that they can address the non compliant taxpayers even
more and try and bring them into the tax base
so they are compliant and contributing. So I think that's
less of an issue. I think the big issue in
Africa is African's over tax. It's just the reality taxed, yes,
in terms of income tax and the concern and that's
one of the reasons why you didn't see them, despite
(07:48):
the pressure to increase revenues, you didn't see them fiddle
personal income tax and corporate tax because in raising that
you'd actually get contrary result in that you'd probably get
less revenue because you'd squeeze growth, and of course you
find that businesses and households would find ways of evading
paying that tax, so you actually hurt the tax revenue
(08:10):
coming through. So back to the main point is the
point I made earlier. Growth is the issue if the
economy was growing faster. Revenue in itself will grow and
would help them achieve their debt stabilization targets.
Speaker 2 (08:24):
Considering that you said that there's a growth problem, are
there any green shoots though you see positives for the
economy moving forward?
Speaker 1 (08:33):
Well, yes, so there has been an increase in the
allocation made to infrastructure. I think the plan is to
spend about a trillion brands on infrastructure over the medium term.
That's of course private sector partnering with the government. So yes,
there is a focus on trying to spend more on
areas that are growth enhancing, but more could be done
(08:56):
in terms of easing regulations, easing labor to the tea
that is a significant issue in South Africa, in addition
to the ongoing spending reviews, actually acting on the outcomes
of those reviews to try and cut inefficient spending, improve
the procurement processes that state owned enterprises. These are all
(09:17):
areas that would help them bring down debt a lot
faster than we're seeing today.
Speaker 2 (09:23):
Ivan stick with us when we come back, we'll dig
into how the markets have reacted and what these budgets
actually tell us about the state of the African economy.
Speaker 5 (09:31):
We'll be right back. Welcome back today.
Speaker 2 (09:39):
We're digging into Africa's economy after two crucial budgets were
revealed this week that was in Ghana and South Africa.
We have our Africa economists Evon and Mango still with us.
So Ivon, what do you make of the reaction that
we've seen to the budgets, especially in the markets.
Speaker 1 (09:55):
So in the case of South Africa, they is caution
and the main way and for that is the second
biggest party in the coalition. I said they're not going
to pass the budget in its current form. So while
a budget has been read, we essentially don't have a
budget as it is and that will be decided over
the coming weeks. Also keep in mind this is the
first time we have a coalition government, so this is
all new. The minister mentioned to himself he's a new territory,
(10:18):
so they have to find themselves. We do believe that
the parties are willing to work together in order to
find some sort of compromise and put forward a budget.
So we're not expecting an untoward result at the end
of these negotiations, but it will take time and the meantime,
the markets will be cautious. We saw the rand losses
yesterday yesterday following the reading of the budget, and that's
(10:41):
just demonstrating investors taking a cautious view.
Speaker 2 (10:46):
And I wonder if we think about what is happening
in the global economy, there is a lot happening for
the markets and for investors globally to digest. I mean,
there are developments in the Middle East, there's developments with Ukraine,
and there's also, of course the the trade war that
has been really started by President Trump and igniting over
the past few weeks. Is that having an impact on
(11:09):
the African economy yet, based on your research.
Speaker 1 (11:13):
That's a good question. I actually dedicated a bigger section
of my reaction to the budget to geopolitics than I
normally do, given that, yes, it is weighing on what's
happening in our part of the world. So for South
African particular, even before the budget, we've seen us AID
cuts that's impacted not just South Africa, but the rest
of the continent. In terms of what the impact has been,
(11:35):
it's particularly the health sector that's been affected In a
country like South Africa. While negative, the impact will be
small and the gap that's been created can be easily
filled by the governments, at least on the health care side.
So we're not overly concerned for South Africa with regard.
Speaker 5 (11:52):
To the aid cuts. The rest of the continent.
Speaker 1 (11:54):
Yes, there are countries which will be hit hardest, particularly
the lower income countries such as Malawi, and in that
case they're going to have to scramble for resources from
other development partners in order to fill that gap. The
other area of concern, of course, is that it is
an important source of foreign exchange, particularly for smaller economies,
so in those countries you could see pressure on currencies.
(12:17):
The other concern is a GOA. A GOA is the
trade agreement that gives duty free access for select African
exports into the US market. In South Africa's case in particular,
I think that we could say at this point there's
a high risk that agreement will not be renewed in September,
given the escalation of tensions between the US and South Africa.
(12:39):
In that case, yes, it does mean Soufrik this case
would lose that duty free access and it impacts in
particular two particular sectors. That is your vehicle or automotive
sector as well as the citrus sunwine industry that's based
in the cave. My third point is around the global
trade or tariff for Ultimately, what that does tend to
(13:02):
imply is that there's a slow down in global growth,
and if that is the case, then it means demand
for commodities or the exports that come out of Africa
will likely slow, which has implications for these countries' external
positions and also their currencies.
Speaker 2 (13:19):
Yeah, and there's even talk in the US about a
potential recession. Now, I mean that wasn't even part of
a few months ago.
Speaker 1 (13:26):
Von.
Speaker 2 (13:26):
Let's just close out with your outlook for twenty twenty five.
I recognize that this is a very difficult question, considering
there is a lot of headwinds that a number of
these economies on the continent are facing. Do you see
some of the bigger economies South Africa, Ghana and Nigeria.
Speaker 5 (13:42):
Though, starting to pick up in growth.
Speaker 1 (13:44):
So in South Africa's case, yes, although growth disappointed last year,
kim in weaker than we'd anticipate it at zero point
six percent, would I expect to pick up? We're still optimistic.
We're our growth forecasts at one point nine percent. And
the reason for that upside is largely due to the
return to more reliable electricity supply, so certainly in South
Africa's case, which is the biggest economy on the continent,
(14:07):
that should help a lift growth for the region. Nigeria,
we expect growth to remain in the three percent region.
We are concerned about the lower oil price given what's
happening globally, so that may be a dampner. But other
than that, inflation is beginning to moderate that particular economy,
which means montrepolicy is not as hawkish and that should
(14:28):
support some sort of recovery in that big economy as well.
Speaker 2 (14:31):
That is Evone Mango Bloomberg Economics Africa Economists, and you
can find her research on the Bloomberg terminal.
Speaker 5 (14:38):
Now Here are some of the.
Speaker 2 (14:40):
Other stories we've been following across the region this week.
The Rwanda backed M twenty three rebel group has consolidated
control over the two largest cities in the Eastern Democratic
Republic of Congo, effectively setting up a proto state in
the mineral rich region and forcibly recruiting soldiers and civilians.
I'm twenty three has added about four thousand Congolese soldiers
(15:03):
and fighters from local armed groups, with hundreds of civil
servants sent for indoctrination at remote bases, according to three
Western officials, three United Nations officials, and one humanitarian worker
in the region and Xarro Resources appointed Ben Magara as
chief executive officer a month after the previous leader of
(15:24):
the South African coal Miner resigned. Nombasa Segua, who had
been on a precautionary suspension over claims related to workplace conduct,
resigned last month over the handling of a probe into
the allegations. You can follow these stories across Bloomberg, including
the Next African Newsletter. We'll put a link to that
in the show notes. This program was produced by Adrian Bradley.
(15:49):
Don't forget to follow and review the show wherever you
usually get your podcasts. I'm Jennifer's Abasaja. Thanks as always
for listening.
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
Ghana and South Africa both delivered budgets this week against
a backdrop of a struggling global economy.
Speaker 3 (00:16):
The state of our economy is troubling, but we will
fix it. It will require some sacrifices, truthfulness, transparency and
discipline to.
Speaker 4 (00:28):
Raise the revel you needed. The government proposes to increase
evetererate by half a percentage point in twenty five twenty
six and by another half a percent a point in
the following year.
Speaker 2 (00:44):
Both countries have big holes in their budgets to fill.
But will the spending cuts and tax rises be enough
and will the public accept them?
Speaker 1 (00:52):
So the democratic Allians will not be supporting the budget
in its current form and therefore the budget being table
to does not have a parliamentary majority.
Speaker 2 (00:59):
On today podcast, we'll look at what these big economies
on two sides of the continent tell us about Africa's
growth story in twenty twenty five. I'm Jennifer Zabasaja and
this is the Next Africa Podcast, bringing you one story
each week from the continent driving the future of global
growth with the context only Bloomberg can provide. Joining us
(01:24):
today is Bloomberg Economics Africa Economists.
Speaker 5 (01:27):
That's von Mango Evon. Thanks so much for being here.
Speaker 2 (01:30):
We haven't had you on the podcast, so appreciate you
making the time.
Speaker 5 (01:33):
Let's just start with Ghana.
Speaker 2 (01:35):
This is the first budget for the new Mohamma administration.
What was Finance Minister Cassio Atto Forsen faced with when
putting his plans together and did he achieve that?
Speaker 1 (01:47):
So the challenge of the John Muhamma administration which has
just come into office is that they've inherited a fiscal miss,
essentially the inherited in economy with high inflation deficits that
will wider than anticipation and they're going to have to
correct this. Their plan is quite ambitious. Their plan to
turn the primary deficit of three point nine percent into
(02:08):
a surplus of one point five percent of GDP this year.
That's quite a significant physical adjustment and will require some sacrifices.
Speaker 2 (02:17):
How realistic is that considering the situation that Gama is
in right now.
Speaker 1 (02:22):
So our primary view is they may all likely miss
that because as I mentioned, that's quite a significant fiscal adjustment.
It requires a significant cut in spending, which they have
pledged to do. As well as a significant increase on
the revenue front. On the revenue side, they've increased levees
to the mining sector and taking advantage of the higher
goal prices, so they'll get income through there. And on
(02:46):
the spending side, yes, I think about a tenth of
the budget in terms of cuts will take places here.
But given that some spending can be and anticipated, you're
likely to see the mess that particular target.
Speaker 5 (02:58):
So what is the target that economics is expecting.
Speaker 1 (03:02):
We expect there to be a small primary deficit or
at least close to zero on the primary deficit side,
would it still be a significant improvement from a deficit
that was around four percent of GDP? In order to
arrest that increase in public debt, you need a primary
surplus and that's what this administration is trying to achieve.
So the goals are commendable, but it will probably take
(03:25):
them longer to achieve them than they're currently suggesting.
Speaker 2 (03:29):
How much do you think gold could potentially be a
contributor to that surplus that the government is trying to achieve.
We are seeing record prices for gold you mentioned mining.
How much could that really move the need of for them?
Speaker 1 (03:43):
Well, it's an important contributor, considering it's one of their
biggest exports, also in this time when prices are quite
significantly high. However, it is not the only driver of revenue.
You need revenue to be performing well in other parts
of the economy. Wouldn't lean too much on the gold
sector getting them out of this fiscal mess that they're in.
Speaker 2 (04:05):
Everyone what's Bloomberg economics expectation for the CD because a
lot of focus is being paid to currencies across the
continent right now.
Speaker 1 (04:12):
So the sceity is likely to continue to come under pressure.
Keep in mind, though they've been successful at restructuring their
debt domestically, they're still haven't got complete access to international
capital marketers yet, so that restrains how much foreign capital
can flow into the country, which implies the currency will
(04:32):
likely continue to come under pressure as they go through
this fiscal consolidation plan.
Speaker 2 (04:37):
So the country is not necessarily out of the woods
yet this new administration.
Speaker 1 (04:41):
Oh not as yet. Of course, the big hurdle has
been jumped, which is debt restructuring, which is a big positive.
But this administration, as they've said themselves, have a big
job to do in terms of correcting the fiscal challenges
that they found. We do think that if they remain
on this path, by the time they reached the end
of their four year term, we should begin to see
(05:04):
a turnaround on the fiscal front and that should begin
to reflect in a much more stable currency and lower inflation.
Speaker 2 (05:11):
Okay, so somewhat positive there for at least this new administration.
Speaker 5 (05:15):
That's only a few months in. Let's turn to South Africa.
Speaker 2 (05:19):
It's also the first budget for this new g and
U coalition government. A lot of different views on the
budget that we got on Wednesday. Talk to us about
your assessment of what was presented.
Speaker 1 (05:32):
Okay, So, as you saw, the budget was delayed by
three weeks and the main reason is the two big
parties in the ruling coalition government disagreed on the VAT increase.
What we did see is a compromise. Instead of a
two percentage point increase in that to seventeen percent, this
new budget proposes fifty basis points hike over the course
(05:55):
of two years, so essentially a percentage point over the
course of two years. So that's a compromise. However, we
are noting that this may not be enough for the
Democratic Alliance to vote for the passage of the budget.
They'd like to see more, in particular proposals that will
expedite growth. I think one of the big challenges So
Africa faces, and we do agree at Bloomberg Economics, is
(06:17):
that So Africa is a growth problem. It's why the
budget persistently misses its revenue targets. That's why there's pressure
on them to use tax policy to increase revenue. However,
on the spending side, more needs to be done, particular
cutting inefficient spending, and that's something the Democratic Alliance is
pushing for. So we are going to see over the
next coming weeks parties within the coalition meeting to discuss
(06:41):
concessions that the NC may need to make in order
to get the likes of the Democratic Alliance to vote
for a budget.
Speaker 2 (06:48):
I've also been struck evon by a lot of the
discussion around tax collection here in South Africa and how
the ideology around that potentially needs to change in the government.
Do you think it's the inefficient way to collect revenue?
Is it what South Africa needs right now, this economy needs.
Speaker 1 (07:07):
I think the Soufric Revenue Service has actually done a
much better job of tax collection in recent years, particularly
under Edward Kristwitter, who was appointed I think about four
years ago, so that has improved. Of course, there's more
that can be done there those that are evading taxes.
I think one of the positives of this budget is
that the allocation to the revenue Authority has been increased
(07:27):
so that they can address the non compliant taxpayers even
more and try and bring them into the tax base
so they are compliant and contributing. So I think that's
less of an issue. I think the big issue in
Africa is African's over tax. It's just the reality taxed, yes,
in terms of income tax and the concern and that's
one of the reasons why you didn't see them, despite
(07:48):
the pressure to increase revenues, you didn't see them fiddle
personal income tax and corporate tax because in raising that
you'd actually get contrary result in that you'd probably get
less revenue because you'd squeeze growth, and of course you
find that businesses and households would find ways of evading
paying that tax, so you actually hurt the tax revenue
(08:10):
coming through. So back to the main point is the
point I made earlier. Growth is the issue if the
economy was growing faster. Revenue in itself will grow and
would help them achieve their debt stabilization targets.
Speaker 2 (08:24):
Considering that you said that there's a growth problem, are
there any green shoots though you see positives for the
economy moving forward?
Speaker 1 (08:33):
Well, yes, so there has been an increase in the
allocation made to infrastructure. I think the plan is to
spend about a trillion brands on infrastructure over the medium term.
That's of course private sector partnering with the government. So yes,
there is a focus on trying to spend more on
areas that are growth enhancing, but more could be done
(08:56):
in terms of easing regulations, easing labor to the tea
that is a significant issue in South Africa, in addition
to the ongoing spending reviews, actually acting on the outcomes
of those reviews to try and cut inefficient spending, improve
the procurement processes that state owned enterprises. These are all
(09:17):
areas that would help them bring down debt a lot
faster than we're seeing today.
Speaker 2 (09:23):
Ivan stick with us when we come back, we'll dig
into how the markets have reacted and what these budgets
actually tell us about the state of the African economy.
Speaker 5 (09:31):
We'll be right back. Welcome back today.
Speaker 2 (09:39):
We're digging into Africa's economy after two crucial budgets were
revealed this week that was in Ghana and South Africa.
We have our Africa economists Evon and Mango still with us.
So Ivon, what do you make of the reaction that
we've seen to the budgets, especially in the markets.
Speaker 1 (09:55):
So in the case of South Africa, they is caution
and the main way and for that is the second
biggest party in the coalition. I said they're not going
to pass the budget in its current form. So while
a budget has been read, we essentially don't have a
budget as it is and that will be decided over
the coming weeks. Also keep in mind this is the
first time we have a coalition government, so this is
all new. The minister mentioned to himself he's a new territory,
(10:18):
so they have to find themselves. We do believe that
the parties are willing to work together in order to
find some sort of compromise and put forward a budget.
So we're not expecting an untoward result at the end
of these negotiations, but it will take time and the meantime,
the markets will be cautious. We saw the rand losses
yesterday yesterday following the reading of the budget, and that's
(10:41):
just demonstrating investors taking a cautious view.
Speaker 2 (10:46):
And I wonder if we think about what is happening
in the global economy, there is a lot happening for
the markets and for investors globally to digest. I mean,
there are developments in the Middle East, there's developments with Ukraine,
and there's also, of course the the trade war that
has been really started by President Trump and igniting over
the past few weeks. Is that having an impact on
(11:09):
the African economy yet, based on your research.
Speaker 1 (11:13):
That's a good question. I actually dedicated a bigger section
of my reaction to the budget to geopolitics than I
normally do, given that, yes, it is weighing on what's
happening in our part of the world. So for South
African particular, even before the budget, we've seen us AID
cuts that's impacted not just South Africa, but the rest
of the continent. In terms of what the impact has been,
(11:35):
it's particularly the health sector that's been affected In a
country like South Africa. While negative, the impact will be
small and the gap that's been created can be easily
filled by the governments, at least on the health care side.
So we're not overly concerned for South Africa with regard.
Speaker 5 (11:52):
To the aid cuts. The rest of the continent.
Speaker 1 (11:54):
Yes, there are countries which will be hit hardest, particularly
the lower income countries such as Malawi, and in that
case they're going to have to scramble for resources from
other development partners in order to fill that gap. The
other area of concern, of course, is that it is
an important source of foreign exchange, particularly for smaller economies,
so in those countries you could see pressure on currencies.
(12:17):
The other concern is a GOA. A GOA is the
trade agreement that gives duty free access for select African
exports into the US market. In South Africa's case in particular,
I think that we could say at this point there's
a high risk that agreement will not be renewed in September,
given the escalation of tensions between the US and South Africa.
(12:39):
In that case, yes, it does mean Soufrik this case
would lose that duty free access and it impacts in
particular two particular sectors. That is your vehicle or automotive
sector as well as the citrus sunwine industry that's based
in the cave. My third point is around the global
trade or tariff for Ultimately, what that does tend to
(13:02):
imply is that there's a slow down in global growth,
and if that is the case, then it means demand
for commodities or the exports that come out of Africa
will likely slow, which has implications for these countries' external
positions and also their currencies.
Speaker 2 (13:19):
Yeah, and there's even talk in the US about a
potential recession. Now, I mean that wasn't even part of
a few months ago.
Speaker 1 (13:26):
Von.
Speaker 2 (13:26):
Let's just close out with your outlook for twenty twenty five.
I recognize that this is a very difficult question, considering
there is a lot of headwinds that a number of
these economies on the continent are facing. Do you see
some of the bigger economies South Africa, Ghana and Nigeria.
Speaker 5 (13:42):
Though, starting to pick up in growth.
Speaker 1 (13:44):
So in South Africa's case, yes, although growth disappointed last year,
kim in weaker than we'd anticipate it at zero point
six percent, would I expect to pick up? We're still optimistic.
We're our growth forecasts at one point nine percent. And
the reason for that upside is largely due to the
return to more reliable electricity supply, so certainly in South
Africa's case, which is the biggest economy on the continent,
(14:07):
that should help a lift growth for the region. Nigeria,
we expect growth to remain in the three percent region.
We are concerned about the lower oil price given what's
happening globally, so that may be a dampner. But other
than that, inflation is beginning to moderate that particular economy,
which means montrepolicy is not as hawkish and that should
(14:28):
support some sort of recovery in that big economy as well.
Speaker 2 (14:31):
That is Evone Mango Bloomberg Economics Africa Economists, and you
can find her research on the Bloomberg terminal.
Speaker 5 (14:38):
Now Here are some of the.
Speaker 2 (14:40):
Other stories we've been following across the region this week.
The Rwanda backed M twenty three rebel group has consolidated
control over the two largest cities in the Eastern Democratic
Republic of Congo, effectively setting up a proto state in
the mineral rich region and forcibly recruiting soldiers and civilians.
I'm twenty three has added about four thousand Congolese soldiers
(15:03):
and fighters from local armed groups, with hundreds of civil
servants sent for indoctrination at remote bases, according to three
Western officials, three United Nations officials, and one humanitarian worker
in the region and Xarro Resources appointed Ben Magara as
chief executive officer a month after the previous leader of
(15:24):
the South African coal Miner resigned. Nombasa Segua, who had
been on a precautionary suspension over claims related to workplace conduct,
resigned last month over the handling of a probe into
the allegations. You can follow these stories across Bloomberg, including
the Next African Newsletter. We'll put a link to that
in the show notes. This program was produced by Adrian Bradley.
(15:49):
Don't forget to follow and review the show wherever you
usually get your podcasts. I'm Jennifer's Abasaja. Thanks as always
for listening.
Host
Jennifer Zabasajja
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