Africa Economic Update (Issue 2)

Issue 2

Business activities in Africa slightly improved in February 2017 albeit at a slow rate. Sales Managers Index (SMI) for Africa – an assessment of business condition in Pan-African Economy – increased by 0.4 index points from 52.2 points in January 2017 to 52.6 points in February 2017. Sub-Saharan African countries experienced better business activities than North Africa in the review period. The two largest economies in the region, Nigeria (48.5 index points) and South Africa (49.2 Index points) registered contraction in the review period as Nigeria remained in recession while high unemployment remained a problem in South Africa. The growth in SMI recorded in the review period is driven by improvement in business confidence and sales price which outweighed the fall in other components – market growth, sales output and staffing level. Another business performance indicator, the manufacturing Purchasing Managers’ Index (PMI) contracted in Nigeria (44.6 index points) and Egypt (46.7 index points) as it remained under 50, while manufacturing PMI in South Africa (52.5 percent) and Kenya (50.1) expanded. This may be attributed to job loss and inflationary pressure as majority of the countries in the region are plagued with double digits inflation rate above their respective Central Banks’ bandwidth. In line with efforts aimed at economic recovery, African states need to enhance their institutional and infrastructural capacities to improve the business environment and allow existing businesses to thrive as well as encourage the establishment of new ones.


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