The US-Iran deal has triggered a slump in energy prices providing relief to Africa’s energy importers, particularly those in East Africa. Energy exporters such as Angola and Nigeria will see their windfalls fade fast. Inflation continued to rise in May, but it should peak in the coming months at far lower rates than in past shocks, leaving most central banks comfortable holding rates. South Africa is an exception but even it is only likely to deliver one more hike.
Debt risks haven’t flared up despite the war, but the outlook for Mozambique will remain challenging as it seeks to restructure its debt. Elsewhere, an overvalued currency and a weak fiscal position mean the risks of a disorderly devaluation and default are rising in Kenya.
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