In August, inflationary pressures eased in South Africa, Ghana, Nigeria, Egypt, and Kenya. Though primarily attributed to favourable base effects, the decline was also driven by lower commodity prices, especially food. Higher for longer interest rates, which positively anchored inflation and exchange rate expectations, also supported the downward trend in inflation, and we expect this direction to continue in September.
However, we do not expect consumer demand to improve substantially despite the expected disinflationary trend. This consumer dynamic will be a significant consideration for long-term investors in consumer goods companies, especially in Nigeria and Ghana, where high inflationary risks persist. Consumers across all five countries will remain cautious, prioritising spending on necessities over luxury items, mainly as consumer confidence stays bearish. In Ghana, for instance, consumers are cautious with spending because of lingering climate-induced drought concerns that could affect the major food-producing regions, thus impacting supply. The government has taken
