Africa: Different pulses

5 min
Stéphane Colliac
Stéphane Colliac Senior Economist for France and Africa

Inflation data characterizes divergent economic momentums in Africa. Most of the currencies depreciated a lot in the last four years, resulting in quite visible inflation accelerations in key economies, like South Africa, Egypt, Angola, Nigeria, Kenya, Ghana or Ethiopia. At the same time, the CFA Franc protected its members from any exchange rate move, but the lower export price shock triggered a deflationary shock. The two developments took their toll on growth, with an impact also depending on policy space and timely international support. Currently, the first country group is benefitting from a disinflation bonanza accompanied by a growth recovery, magnified by easing monetary policy and credit conditions. The group of CFA Franc countries diverges, as inflation remains very low and growth is not widespread. Within the CFA country group, the West African zone shows strong growth, allowed by lower debt levels and stronger international support. In the Central African zone, a debt deflationary shock is still materializing, with the Congo Republic being the most heavily affected.