What PMIs tell us about economic recoveries in Africa In H1-2020, the economic performance of all the African countries under our coverage deteriorated from that of an expansion to a broad-based contraction/slowdown.
This was as the global outbreak of the COVID-19 pandemic as well as the associated lockdown measures implemented to curb its spread exacerbated other pre-existing vulnerabilities and dragged economic activities across the region.
So far in H2-2020, recovery appears to be underway as governments across the continent have begun to gradually ease lockdown measures, even as the active cases of COVID-19 continue to rise. This sign of recovery in economic activities is confirmed by the few monthly Purchasing Managers’ Index (PMI) readings seen across the region.
Notably, while the contraction/slowdown were broad-based in H1-2020 (especially in Q2-2020, which marked the peak of lockdown in most countries), the rate of recovery as indicated by PMI data have shown a considerable disparity.
Specifically, indications are that economic recoveries among the regional giants Nigeria, South Africa, and Egypt, could disappoint in Q3-2020E. On the other hand, we could see strong GDP recoveries in Kenya and Uganda where PMI has crossed the 50.0pts expansionary level since July-2020.
Also, Ghana’s PMI (another country under our coverage) suggests that economic activity has stabilized since June-2020 and might further improve in the coming months.
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