<p>By Cobus de Hart, Chief Economist West and North Africa, NKC African Economics</p>
<p>The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) concluded its most recent meeting on Thursday and decided to keep all policy instruments unchanged, with the Monetary Policy Rate (MPR) at 14%.</p>
<p>In assessing the risks to the inflation outlook, the committee expressed its concern about weak growth expectations and mounting uncertainty in global financial markets. On the domestic front, the economy is forecast to expand by 1.8% in 2018 (in line with our projection), but the CBN highlights that the economic rebound remains especially fragile.</p>
<p>The MPC reiterated its call for the CBN to take the necessary actions to encourage banks to step up lending to the private sector, with a focus on employment-intensive industries. They also urged the apex bank to broaden the scope of the Anchor Borrowers Programme to industries such as fishing and palm oil production “by introducing more stringent measures to curb access to foreign exchange for products that can be produced within Nigeria”.</p>
<p>In terms of the monetary environment, the slight moderation in inflation during October was welcomed. Also, while price pressures are seen mounting somewhat towards year-end, the MPC believes that upside risks to the outlook are largely contained.</p>
<p>The apex bank argues that the proposed increase in the minimum wage would stimulate output growth and will have a negligible impact on inflation given that monetary aggregates have underperformed thus far in 2018. Exchange rate stability, meanwhile, would “continue to moderate pressures on the domestic price level”.</p>
<p>Finally, the MPC acknowledged that it has kept the policy stance stable for some time now but noted that “a hold position is an expression of confidence in the policy regime, given the gradual improvements in both output growth and price stability”.</p>
<p>The decision to hold all policy instruments stable for now was expected. It seems as if the pendulum has now swung away from tightening the policy stance – all 11 MPC members voted for a hold this time around, whereas only seven members voted this way in September with the remainder preferring a tightening of policy.</p>
<p>Unfortunately, the outlook for the monetary environment is very uncertain. Inflationary pressures seem to be contained for now, but fiscal slippage ahead of the election poses some upside risk – as does the proposed minimum wage.</p>
<p>The MPC’s comment that the central bank should apply stricter measures to curb access to FX for goods that can be produced locally suggests that the bank remains committed to using foreign exchange as a tool to drive diversification – economists do not deem this to be a particularly sound strategy as it serves to discourage foreign direct investment and risks the creation of globally uncompetitive industries. The aforementioned comment also suggests that the central bank will continue to utilise reserves in an attempt to keep the exchange rate stable. However, foreign reserves have trended broadly lower in recent months and, apart from external debt accumulation providing temporary reprieve, the pressure on the foreign currency buffer could intensify if domestic demand starts to gain more traction.</p>
<p>The recent slide in global oil prices also represents a risk in this regard.</p>
<p>To cloud the outlook even further, the outcome of the election early next year may also hold significant implications for monetary policy, with the opposition People’s Democratic Party (PDP) candidate, Atiku Abubakar, recently stating that he would prefer a more market-determined exchange rate approach.</p>
<p>Mr Abubakar believes this, along with the implementation of other business-friendly policies, would bolster much needed foreign investment. However, even if Mr Abubakar were to become president, there is no certainty that campaign promises would be followed through with.</p>
<p>All of this said, it now looks as though the monetary policy stance will remain unchanged well into next year.</p>


Op-Ed: Nigeria’s MPC shifts gears to neutral

<p>ABIDJAN (Reuters) &#8211; Consumer price inflation in Ivory Coast rose to 0.8 percent year-on-year in October, up from 0.5 percent in September, data from the National Statistics Institute showed on Monday.</p>
<p>Food and soft drink prices in the world’s top cocoa producer rose 0.5 percent year-on-year, while housing and utilities prices jumped 3.1 percent. Transport costs rose 1.2 percent.</p>
<p>Ivory Coast’s economy accounts for around 40 percent of the eight-nation West African CFA franc currency zone.</p>
<p>Reporting By Loucoumane Coulibaly; Editing by Aaron Ross and Matthew Mpoke Bigg</p>


This West African country’s inflation has rose to 0.8 percent year-on-year in October

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<p>The European Central Bank is leaving its benchmark interest rates unchanged. President Mario Draghi expressed confidence in the euro zone inflation rally which is expected to pick up towards the end of the year. At a press conference of the monetary policy decision he had this to say.</p>


Mario Draghi on why the ECB kept rates unchanged

<p>JOHANNESBURG (Reuters) &#8211; South Africa’s headline consumer inflation slowed to 4.9 percent year-on-year in August from 5.1 percent in July, data from Statistics South Africa showed on Wednesday.</p>
<p>On a month-on-month basis, inflation contracted 0.1 percent in August after rising from 0.8 percent in July.</p>
<p>Core inflation, which excludes the prices of food, non-alcoholic beverages, petrol and energy, fell to 4.2 percent year-on-year in August from 4.3 percent in July, while on a month-on-month basis was flat at 0.0 percent from 0.6 percent.</p>
<p>Reporting by Olivia Kumwenda-Mtambo; Editing by James Macharia</p>


SA’s headline consumer inflation slowed to 4.9 percent year-on-year in August, what you need to know…

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<p>Ghana’s Inflation for the month of June rose to 10 percent, compared to the 9.8 per cent recorded in May this year. Collins Appiah, Economic Advisor at Services Integrity Savings and Loans joins CNBC Africa from Ghana to discuss the economic events that may have influenced the recent inflation figures.</p>


Ghana June inflation rises to 10%

<p>LAGOS (Reuters) &#8211; Annual inflation in Nigeria slowed to 11.61 percent in May, its lowest level in more than two years and its 16th straight monthly drop, the National Bureau of Statistics said on Wednesday.</p>
<p>It fell from 12.48 percent in April. A separate food price index showed inflation at 13.45 percent in May, compared with 14.80 percent in April.</p>
<p>Food inflation has been in double digits for almost three years, but has slowed for more than six months.</p>
<p>The statistics office said the highest increases were recorded in potatoes, yam and other tubers, as well as vegetables plus fish, bread and cereals.</p>
<p>Last month the central bank governor held interest rates at 14 percent, saying that inflation was still above its single-digit target. The bank said inflation could worsen again with the influx of cash from spending related to Nigeria’s much-delayed 2018 budget.</p>
<p>Nigeria emerged from its first recession in 25 years in 2017, helped by higher oil prices, but growth remains fragile.</p>
<p>It passed a record 9.12 trillion naira budget last month meant boost growth, but excessive spending could stoke inflation especially in the run-up to February 2019 presidential election.</p>
<p>The central bank has kept benchmark rates tight for more than a year to curb inflation, support the naira and attract foreign investors into its debt market.</p>
<p>Reporting by Chijioke Ohuocha and Didi Akinyelure; Editing by Alison Williams</p>


Nigeria’s inflation hits two-year low in May: Here are the country’s highest increases recorded

<p>Justina Crabtree</p>
<p>Source: <a href="https://www.cnbc.com/2018/06/01/south-africa-minimum-wage-the-beginning-of-a-difficult-process-finance-minister-nene.html">South Africa&#8217;s new minimum wage is the &#8216;beginning of a long, difficult process&#8217;: Finance minister</a></p>
<ul>
<li>South Africa&#8217;s introduction of a minimum wage marks &#8220;the beginning of a long, difficult process,&#8221; Minster of Finance Nhlanhla Nene has told CNBC.</li>
<li>Africa&#8217;s most industrialized economy introduced a minimum wage of 20 rand ($1.58) per hour earlier this week. The change was originally intended for May 1 but was delayed over adjustments made to the legislation.</li>
<li>South Africa is one of the most unequal societies in the world, and infamously suffers from high unemployment. This was 26.7 percent in the first quarter of 2018.</li>
</ul>
<p><img loading="lazy" decoding="async" src="https://cdn.cnbcafrica.com/wp-content/uploads/2018/04/30103531/105165163-GettyImages-951075784.1910x1000.jpg" alt="" height="1000" width="1910" data-licensor-name="Rodger Bosch | AFP | Getty Images"/></p>
<p>
 The introduction of South Africa&#8217;s new minimum wage is the start of a &#8220;long, difficult process,&#8221; the country&#8217;s minister of finance said Thursday.</p>
<p>South Africa&#8217;s parliament passed a minimum wage bill by a large majority on Tuesday, meaning that millions of workers will now earn 20 rand ($1.58) per hour. This is equivalent to 3,500 rand ($277) per month.</p>
<p>&#8220;It&#8217;s the beginning of a long, difficult process, because at the end of the day we&#8217;ve never had (a minimum wage),&#8221; Nhlanhla Nene told CNBC on Thursday at the OECD conference in Paris.</p>
<p>The minimum wage was due to be introduced on May 1 but was delayed due to government bodies redrafting legislation. South Africa&#8217;s main opposition party, the Democratic Alliance, opposed the bill. The country&#8217;s second-largest trade union, unhappy with the proposed wage,<br />
organized a strike in April<br />
 calling for a higher figure.</p>
<p><img loading="lazy" decoding="async" src="https://cdn.cnbcafrica.com/wp-content/uploads/2018/06/10125923/105244966-GettyImages-931267604.1910x1000.jpg" alt="" height="1000" width="1910" data-licensor-name="Simon Dawson | Bloomberg | Getty Images"/></p>
<p>South Africa is one of the most unequal societies in the world. According to the<br />
World Bank<br />
, the poorest 20 percent of South Africans consume less than 3 percent of the country&#8217;s total expenditure. Meanwhile, the wealthiest 20 percent account for 65 percent.</p>
<p>Introducing a minimum wage could help alleviate this, and also stimulate much-needed economic growth by boosting consumer spending. South Africa&#8217;s consumer price inflation has been on a largely downwards trajectory since early 2016, hitting a seven-year low of 3.8 percent in March. But, in April it rebounded to 4.5 percent as a result of price rises in product groups that are specifically taxed, according to Statistics South Africa.</p>
<p>But, some fear that a minimum wage could lead to a rise in unemployment, already at 26.7 percent for the first quarter of this year.</p>
<p>While Nene acknowledged that laying off workers could be an &#8220;unintended consequence,&#8221; he argued that the new legislation has provisions to &#8220;protect&#8221; jobs, allowing for businesses struggling to pay their workers to submit to the government for an exception.</p>
<p>Establishing a minimum wage has been a key proposal of South African President Cyril Ramaphosa since he took power in February. Appeasing the country&#8217;s electorate may be on his mind as he faces election in 2019.</p>
<p>Mixed reaction from major trade unions</p>
<p>South Africa&#8217;s largest trade union group, the Congress of South African Trade Unions (COSATU), welcomed the news.</p>
<p>The minimum wage means that the incomes of 6.4 million South Africans will rise, Matthew Parks, COSATU&#8217;s parliamentary coordinator, said in a statement reported by Reuters. &#8220;This is equal to 47 percent of workers and will directly benefit half the nation.&#8221;</p>
<p>But the second largest trade union bloc, the South African Federation of Trade Unionists, said that it was &#8220;disgusted&#8221; by the news, adding that the government had bowed down to &#8220;white monopoly capitalists.&#8221;</p>
<p>It is pushing a living wage of 12,500 rand and has said that more protests are planned.</p>


South Africa’s new minimum wage is the ‘beginning of a long, difficult process’: Finance minister

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<p>Nigeria&#8217;s annual inflation dropped to 13.34 percent in March, its lowest level in two years; Bismarck Rewane, CEO of Financial Derivatives joins CNBC Africa to unpack the numbers.</p>


Nigeria’s inflation drops to 13.34% in March

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<p>Ahead of the release of Nigeria&#8217;s February Inflation figures, Financial Derivatives says it expects a steeper drop for headline inflation to 14.75 per cent from the 15.13 per cent recorded in January.</p>


Nigeria’s inflation projected to drop in February

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<p>Data from the National Bureau of Statistics showed that Nigeria’s inflation for December 2017 slowed to 15.37 per cent from 15.91 per cent in November. Yemi Kale, Statistician General of the National Bureau of Statistics joins CNBC Africa from Abuja for an outlook on inflation in 2018.</p>


Nigeria’s inflation drops to 15.37 % in December – Yemi Kale

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<p>Despite the commodities slump in 2016 that saw Sub Saharan Africa grow by 1.3 per cent, Rwanda grew by 5.9 per cent. With a relative recovery in commodities and inflation abating, Ted Kaberuka an Economist shared views on the health of the economy.</p>


Rwanda economy shows signs of upswing

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<p>Rwanda has organised the saving week under the theme &#8220;Our savings, Our Wealth&#8221; in a bid to conduct awareness campaigns and encourage people to save.</p>


Savings week kicks off in Rwanda

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<p>Ghana’s September inflation figures have fallen from 12.3 per cent in August to 12.2 per cent. Collins Appiah, Economist joins CNBC Africa from Accra to discuss how far away the country is from its 8 per cent target.</p>


Ghana inflation falls to 12.2% in September

<p data-reactid="39">Rwanda’s year-on-year inflation rose to 3.8 pct in September from 3.2 percent month earlier, the National Bureau of Statistics said on Tuesday.</p>
<p data-reactid="40">Month-on-month inflation was 1.1 percent. The rise was mainly due to food and non-alcoholic beverages, housing, water, gas and electricity, the report said.</p>
<div class="Attribution_attribution_o4ojT" data-reactid="41">
<p class="Attribution_content_27_rw" data-reactid="42">Reporting by Clement Uwiringiyimana; Writing by Katharine Houreld; Editing by Catherine Evans</p>
</div>


Rwanda’s year-on-year inflation at 3.8% in Sept: stats office

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<p>The recovery in both salaries and pensions continued in as both averaged increases above the rate of inflation for the sixth consecutive month. BankservAfrica data indicates that salaries increased by 1.1 per cent on average, after inflation.</p>


Sustained positive real growth for both disposable salaries

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<p>Annual inflation in Nigeria slowed for the seventh month in August, easing to 16.01 per cent, from 16.05 per cent in July. Michael Famoroti, Analyst at Vetiva Capital joins CNBC Africa to explain the numbers.</p>


Nigerian inflation slows for seventh month in August to 16.01%

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<p>Intra-African trade currently stands at 12 per cent, signifying the need for individual countries to customize their own solutions to push this number higher.</p>


inflation

Op-Ed: Nigeria’s MPC shifts gears to neutral

This West African country’s inflation has rose to 0.8 percent year-on-year in October

Mario Draghi on why the ECB kept rates unchanged

SA’s headline consumer inflation slowed to 4.9 percent year-on-year in August, what you need to know…

Ghana June inflation rises to 10%

Nigeria’s inflation hits two-year low in May: Here are the country’s highest increases recorded

South Africa’s new minimum wage is the ‘beginning of a long, difficult process’: Finance minister

Nigeria’s inflation drops to 13.34% in March

Nigeria’s inflation projected to drop in February

Nigeria’s inflation drops to 15.37 % in December – Yemi Kale

Rwanda economy shows signs of upswing

Savings week kicks off in Rwanda

Ghana inflation falls to 12.2% in September

Rwanda’s year-on-year inflation at 3.8% in Sept: stats office

Sustained positive real growth for both disposable salaries

Nigerian inflation slows for seventh month in August to 16.01%

One-on-one with new Rwandan minister for trade, industry and EAC affairs

News Tips

Advertise With Us

inflation

Op-Ed: Nigeria’s MPC shifts gears to neutral

This West African country’s inflation has rose to 0.8 percent year-on-year in October

Mario Draghi on why the ECB kept rates unchanged

SA’s headline consumer inflation slowed to 4.9 percent year-on-year in August, what you need to know…

Ghana June inflation rises to 10%

Nigeria’s inflation hits two-year low in May: Here are the country’s highest increases recorded

South Africa’s new minimum wage is the ‘beginning of a long, difficult process’: Finance minister

Nigeria’s inflation drops to 13.34% in March

Nigeria’s inflation projected to drop in February

Nigeria’s inflation drops to 15.37 % in December – Yemi Kale

Rwanda economy shows signs of upswing

Savings week kicks off in Rwanda

Ghana inflation falls to 12.2% in September

Rwanda’s year-on-year inflation at 3.8% in Sept: stats office

Sustained positive real growth for both disposable salaries

Nigerian inflation slows for seventh month in August to 16.01%

One-on-one with new Rwandan minister for trade, industry and EAC affairs

News Tips

Advertise With Us

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