Ethiopia conflict, Nigeria cuts rates, SA hikes

This week’s renewed fighting raises the risk of Ethiopia sliding back into civil war, threatening what had up to now looked like strong growth prospects. Elsewhere, Nigeria’s large 350bp rate cut should help to revive credit growth, though monetary easing is likely to proceed more gradually from here. In South Africa, we think the SARB’s rate hike this week will be the last in this cycle, with underlying services inflation less concerning than the headline rate suggests and fading energy pressures likely to support sizeable rate cuts next year.