Biggest African Economies Stall on Politics, Commodity Slump – Bloomberg

Africa’s two largest economies are stalling amid slumping commodity prices and political infighting that’s hampering decision making.

A government report on Wednesday will probably show Nigeria contracted for a second consecutive quarter in the three months through June as the price and output of oil, its main source of revenue, were squeezed.

While South Africa may have avoided falling into a recession, according to the median estimate of five economists surveyed by Bloomberg, the continent’s most-industrialized economy will not grow this year, the nation’s central bank said last month.

The global slump in commodity prices and weak demand from the continent’s main export partners have hit Nigeria, Africa’s second-largest oil producer, and South Africa, where mining produce accounts for about half of export earnings, weighing on both economies.

A shortage of foreign currency in Nigeria after the central bank held a currency peg for more than a year, curbed imports, further limiting output, while political uncertainty in South Africa increased in the last week.

“Both countries’ economies are on a declining path,” Manji Cheto, senior vice president at Teneo Intelligence in London, said by phone. “That’s being led by politics in South Africa, and government policies that are reactive in Nigeria and might not work in the short term.”

Read more at http://www.bloomberg.com/news/articles/2016-08-29/africa-s-biggest-economies-stall-on-politics-commodity-slump