Global Economy

US: The U.S. Federal Reserve voted 9-2 to keep interest rates unchanged at 4.25%–4.5%, despite pressure from President Trump and dissent from Governors Bowman and Waller, who pushed for cuts. This marks the first multi-governor dissent since 1993. The Fed cited moderating economic activity and persistent inflation, though uncertainty remains elevated. Chair Powell emphasized no decision has been made on a September cut, dampening market expectations. While traders had priced in a 64% chance of a cut next meeting, that fell to 46% after Powell’s remarks.

Sub-Saharan African Economies

Euro Area: The Eurozone economy grew by just 0.1% QoQ in Q2 2025, down from 0.6% in Q1 and marking the weakest pace since late 2023. While the figure beat flat-growth forecasts, the slowdown reflects cautious sentiment amid easing inflation, lower rates, and rising US trade tensions. Spain (+0.7%) and France (+0.3%) led growth, while Germany and Italy both contracted by 0.1%.

Ghana: The Bank of Ghana cut its policy rate by 300bps to 25% on July 30, citing sustained disinflation, strong growth, and improved external buffers. Headline inflation fell to 13.7% in June, while real GDP grew 5.3% in Q1 2025, driven by agriculture and services. The external sector recorded a $5.6bn trade surplus and a $3.4bn current account surplus in H1 2025, with reserves rising to $11.1bn. The cedi appreciated 42.6% YTD. The central bank remains committed to supporting recovery while preserving macroeconomic stability.

South Africa: The South African Reserve Bank cut its policy rate by 25bps to 7% on July 31, marking the lowest level since November 2022. The move, widely expected, comes amid rising concerns over the potential impact of new U.S. tariffs on the fragile economy. Policymakers cited easing inflation June CPI came in at 3.0% headline and 2.9% core and a stronger rand as supportive factors. Inflation is projected to edge up to 3.3% in 2025 before stabilizing at 3% by 2027. However, the growth outlook remains weak due to persistent supply-side constraints, particularly in logistics. As a result, the SARB revised its 2025 and 2026 GDP forecasts down to 0.9% and 1.3%, respectively, while upgrading 2027 growth to 2%.

Kenya: Kenya’s annual inflation accelerated to 4.1% in July 2025, the highest in three months, from 3.8% previously. Upward pressure came mostly from prices of food and non-alcoholic beverages, transport, and housing & utilities. On a monthly basis, consumer prices rose by 0.1% in July, the smallest increase in nearly a year, after a 0.5% advance in the prior month.

Domestic Economy

Major updates during the week:

  • The IMF has upgraded Nigeria’s 2025 growth forecast to 3.4% (from 3.0%) on improved reform confidence, aligning with NBS data showing rebased GDP at ₦372.82trn and Q1 2025 growth at 3.13% YoY, though still trailing the 7% pace needed for the $1trn economy target by 2030.
  • The FIRS has announced it will stop issuing tax exemption certificates to all entities, including pioneer status companies, due to concerns over the programme’s effectiveness, with existing certificates to remain valid until expiry; this comes amid rising fiscal costs, with N6trn lost to waivers in 2021, and plans to replace the incentive with a yet-undefined Economic Development Incentive.

Nigerian equity market: Ngx smashes 141,000 points as bullish rally hits 10th week

The NGX All-Share Index soared 5.07% to a new all-time high of 141,263.05 points, marking ten straight weeks of gains. Market capitalization rose by 5.08% to ₦89.37 trillion, bolstered by Seplat’s 11.5 million share listing and the delisting of MRS Oil Nigeria Plc. Gains were broad-based, led by the Industrial Goods sector which rose 10.12% week-on-week, supported by strong performances from MTNN (20.00%) and WAPCO (19.15%). In total, 54 equities advanced while 49 declined, reflecting strong investor rotation into large-cap names. The rally was driven by sustained interest in key sectors including Industrial Goods, Banking, and Consumer Goods.

Nigerian fixed-income market: Bearish sentiment prevails amidst buoyant system liquidity

At the start of the week, the Debt Management Office (DMO) adopted a more cautious approach at the bond auction, successfully allotting ₦185 billion despite total subscriptions exceeding ₦300 billion against an offer size of ₦80 billion. Notably, stop rates declined compared to the previous auction, yields on the 2029s dropped to 15.69% from 17.75%, while the 2032s fell to 15.90% from 17.95%. Despite expectations of a bullish secondary market reaction, sentiment turned bearish as investors shifted focus to a potential OMO auction, driven by ample system liquidity. As a result, average yields on treasury bills inched up by 1 basis point to 17.66%, while bond yields rose by 14 bps to 16.39%. In contrast, Nigeria’s Eurobond market saw increased demand, with the average yield declining by 3bps to 8.34%.