MACRO- ECONOMIC OVERVIEW OF RBJ COUNTRIES

Macro-economic analysis - RBJ countries

MACRO-ECONOMICOVERVIEW OFRBJ COUNTRIES

WFP-RBJ

Updated 12.05.2020

Since low oil prices plunged the country intofinancial crisis in 2015, the government hassought to diversify the economy and has takenseveral tentative regulatory and financial stepstowards achieving this goal. It has achievedsuccess in some areas, but other sectors continueto struggle. As the country enters its fifth year ofrecession, its efforts will be further stymied bythe coronavirus pandemic.Inflation is expected to rise to an average of 24%in 2020 (from an average of 17.1% in 2019). Thiswill be driven by sustained weakness of thekwanza due to decimated oil exports (and USdollar availability) and the introduction inOctober 2019 of VAT, initially at 14%. From 2021the slower rate of depreciation of the kwanzawill lead to a broad downward trend in inflation,although the eventual reduction in severalsubsidies (such as electricity and fuel) will keepprices elevated. It is forecast that annual averageinflation will decline to 10.4% in 2024.

ANGOLA MACRO-ECONOMIC

OVERVIEW11

The economic structure risk rating is downgraded toCC[2] (from CCC[3] previously), owing to an increasein gross external debt to GDP. External Debt inAngola increased to 47553.80 USD Million in 2019from 46981.70 USD Million in 2018[4]. Fiscalreliance on oil revenue accounting for 83.7% ofexport revenue in 2019 and a lack of diversificationsustain economic structure risk, which has beenexacerbated by the crash in oil prices amid the globalcoronavirus outbreak. The drop in oil prices and theimpact of the coronavirus weakens Angola's fiscalpicture.

ECONOMICSTRUCTURERISK

BALANCE OFTRADE

Angola's trade surplus narrowed to USD 4,933million in the third quarter of 2019 from USD7,073.6 million in the same period a year ago.Exports slipped 24.6 percent from a yearearlier to USD 8,140.9 million, dragged downby lower shipments of oil (-25.5 percent) whilediamonds sales rose 13.3 percent. Meantime,imports fell 13.8 percent to USD 3,207.9million, amid reduced acquisitions ofconsumption goods (-9.2 percent);intermediate goods (-24 percent) and capitalgoods (-19.5 percent).

Macro-economic analysis - RBJ countries WFP-RBJ

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SOVEREIGNRISK

COVID -19 POLICY RESPONSES

EXCHANGE RATE

A large public debt stock continues to weigh on therating, leaving the sovereign risk exposed to shocks(notably related to oil prices, emerging-marketsentiment and lending sentiment in China).Thesharp drop in oil prices will decimate governmentrevenue and necessitate revisions to the proposed2020 budget. This will slow the reform agendaunder the current IMF programme, and furtherfinancial assistance will be needed to avoid abalance-of-payments crisis.

The National Assembly approved a package ofrevenue and expenditure measures to fight theCOVID-19 outbreak in the country and to minimize itsnegative economic impact. Additional health carespending to respond to the virus, estimated at US$40million, was announced. Tax exemptions onhumanitarian aid and donations and some delays onfiling taxes for selected imports were granted.

FISCAL POLICY

On March 27, 2020, the central bank (BNA) reducedthe rate on its 7-day permanent liquidity absorptionfacility from 10 percent to 7 percent. In addition, theBNA announced the equivalent of 0.5 percent of GDPto be provided as liquidity support to banks andcreated a liquidity line (equivalent toUS$186 million)for the purchase of government securities from non-financial corporations. In addition, the BNA hasexpanded its credit-stimulus program that allowsbanks to deduct from their reserve requirementobligations the amount of credit extended to selectedsectors targeted by an ongoing importsubstitution/export promotion program. From March30th, financial institutions that carry out creditoperations are allowed to grant their clients amoratorium of 60 days for servicing the debt. On April3, the BNA announced that the minimum allocation ofcredit to promote the production of a set of priorityproducts would increase from 2 percent to 2.5 percentof the commercial banks net assets. To mitigate risks ofshortages of essential goods, which are predominantlyimported, on April 18, the BNA instructed banks toprovide credit in local currency to assist importers.

MONETARY POLICY

It is expected that the exchange rate will continue toplay a shock-absorbing role. On April 1, the centralbank introduced an electronic platform for foreignexchange transactions, which will be progressively

extended for all such transactions.

WFP-RBJMacro-economic analysis - RBJ countries

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IMPACTS ON MARKETS & FOODSECURITY

The COVID19 induced trade shocks as well as plummeting prices of oil will certainly impact traderevenues negatively and further impact the government’s ability to implement fiscal stimulus measures.Falling oil exports and USD availability will increase inflation in 2020 and affect food prices. Tight creditconditions constrain private consumption; and low oil prices and global economic contraction limitinvestment, EIU projects that real GDP will contract by 4.1% in 2020. This will have negativeimplications on employment levels and labour demand. Loss of income sources due to marketcontraction will lead to decrease in demand for market supplies for households relying on incomethrough skilled or semi-skilled labour and increase in demand for transfers. Informal markets will beimpacted mainly due to movement restrictions. While subsistence farmers may not be impacted byeconomic policies as much, Angola has a high food import content which will continually be affected bycurrency depreciation and increased food import bills increasing food inflationary pressures. A fall inexports and low oil revenue limits the ability of the government to ramp up spending significantly andprovide social safety nets to protect incomes during the lockdown. In addition, a reduction in foreignexchange will hamper implementation of development programmes and negatively impact povertyalleviation efforts. As such, long term restrictions on movement and economic activity may not beaffordable.


BOTSWANA MACRO-ECONOMIC

OVERVIEW 2Economic diversification efforts in Botswana willbe delayed, as its mineral-dependent economygoes into recession in 2020, owing to the adverseeconomic impact of the coronavirus. Thediamond-mining sector, which is the country'smainstay and was previously suffering fromsubdued demand in 2019, has come to a halt.Proceeds from the second sale by De Beers inFebruary declined by 36% year on year, while thethird sale (scheduled for March) was suspended,owing to travel restrictions. Furthermore, globaltravel restrictions have brought the tourismindustry to a standstill. Tourism revenue hasplummeted, and the hospitality sector isincurring significant financial losses as a result ofinternational travel restrictions and falling globaldemand. For Botswana, tourism remains asignificant foreign-exchange earner and is one ofthe most labour-intensive sectors, employingabout 8% of the total workforce in the country.

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Economic structure risk is BBB-rated[8].Botswana's dependence on the mining sectorfor exports (at 81 percent in 2017) and fiscalrevenue makes it vulnerable to globalheadwinds. Although the current account willremain in surplus, the non-mining privatesector is constrained by high labour costs andchronic power shortages.


BALANCE OFTRADE

Botswana posted a trade surplus of BWP 333.6million in January of 2020, higher than thatrecorded a year ago of BWP 130.5 million. Thiswas the first trade surplus since June of lastyear, as exports soared 8.2 percent to BWP5,179 million, mainly boosted by sales ofdiamonds (7 percent) and machinery &electrical equipment (130 percent). Meanwhile,imports rose 4 percent to BWP 4,845 million,driven by acquisitions of fuel (75.2 percent);machinery & electrical equipment (21.2percent) and food, beverages & tobacco (15.8percent). Main export partners were India (27.8percent of total sales), Belgium (18.5 percent)and South Africa (16.1 percent) whereas themain import partners were South Africa (75.5percent of total purchases) and Canada andIndia (4 percent each).

[7] EIU[8] An obligor has ADEQUATE capacity to meet its financial commitments. However, adverse economic conditions or changing circumstances are more likely tolead to a weakened capacity of the obligor to meet its financial commitments.


SOVEREIGNRISK


The sovereign risk remains A-rated[9], underpinnedby a sizeable stock of foreign reserves that can beused for debt repayments and manageable debt-related indicators, and the score is unchanged. Inaddition, a current-account surplus supports therating. The fiscal deficit is equivalent to 3.7% of GDPbut will pose a low risk to prudential debtmanagement.

The government established a Covid-19 ReliefFund with a 2 billion Pula (about 1,1 percent ofGDP) contribution from the government that will:i) Finance a wage subsidy amounting to 50% ofsalaries of affected businesses (1000-2500 pulaper month for a period of 3 months;ii) Finance a waiver on training levy for a period of6 months (150 million pula). The MoF also decideda tax deferral of 75% of any quarterly paymentbetween March and September 2020 to be paid byMarch 2021.;iii) Build-up of fuel and grain reserves, as well asacquisition of relevant medical equipment andimprovement of water supply (475 million Pula);iv) Fund a government loan guarantee scheme of 1billion Pula (20% financed by commercial banks)for businesses that are tax compliant (includingthose who are not eligible to pay taxes/).Guarantee covers a period of 24 months with amax of 25 billion pula per borrower. Reduce theVAT refund period (from 60 days to 21 days).

FISCAL POLICY

Banks and nonbanks have agreed to offer loanrestructuring (including for mortgages and vehicles) andpayment holidays for affected sectors. Life insurancepayment premiums and retirement fund contributionshave been rescheduled for at least three months. The Bankof Botswana relaxed rules to meet capital requirementsand introduced measures to improve liquidity. Capitaladequacy ratio for banks has been reduced from 15 to12.5 percent, and regulatory forbearance for non-performing loans. Overnight funding costs were reduced,access to repo facilities broadened, and collateralconstraints for bank borrowing from the BoB extended toinclude corporate bonds and traded stocks.

MONETARY POLICY

EXCHANGE RATE

No measures. The central bank maintains acrawling peg vis-à-vis a basket of currencies.



Informal sector workers and small businesses could face devastating economic consequences as thelockdown means that bus drivers, car washers, hawkers and street vendors are no longer able to earn a living.In the rural side, livestock sector represents 87% of the agriculture’s contribution to the GDP (FAOSTAT,2012). As market demand contracts, incomes from the rural livestock demand may decline. In terms of food,the country is a net importer of food grains and cereals. Impact of closed borders will have a negative impacton the supply of food and a combination of household income (mostly urban) and supply deficit at marketlevel may contribute to price inflation. However, the governments response through its monetary and fiscalresponses may counter these shocks in the short/mid-term.


DRC MACRO-ECONOMIC

OVERVIEW 3Prior to the coronavirus pandemic, the DRC wasalready dealing with an Ebola outbreak, which wasdeclared a global health threat by the WorldHealth Organisation in mid-2019. The pandemicwill further overwhelm the poor and fragile publichealth sector. The fiscal deficit will widen from anestimated 1.1% of GDP in 2019 to 2.1% of GDP in2020 as revenue collection falters and spendingpressures rise. It will then contract in 2021, to1.8% of GDP, on the back of rising revenue fromthe mining sector. Real GDP will contract by 2.8%in 2020, owing to the economic fallout from thecoronavirus pandemic and mine closures.

The current-account deficit/GDP ratio is forecastto widen, from an estimated 4.5% in 2019 to 5% in2020, before contracting to 4.4% in 2021. Thewidening in 2020 will be due to a contraction inexport earnings, driven by mine closures and aglobal demand slump.

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ECONOMIC STRUCTURERISKEconomic structure risk is CCC[11]-rated. The export base is narrow and copper-dependent,and thus vulnerable to drops in production and swings in global prices. Poor infrastructure andinvestment conditions, as well as policy incoherence, hamper efforts at economicdiversification. Reliance on China for investment inflows exposes the country to declininginvestor confidence there.

BALANCE OFTRADE

DR Congo recorded a trade surplus of 994.20USD Million in 2018.

[7] EIU[8] An obligor has ADEQUATE capacity to meet its financial commitments. However, adverse economic conditions or changing circumstances are more likely tolead to a weakened capacity of the obligor to meet its financial commitments.


SOVEREIGNRISK

The sovereign risk rating is at CCC. Public debt andexternal debt are low, at 17.5% of GDP and 9.9% ofGDP respectively, although this mainly reflects limitedaccess to financing. The rating remains weighed downby a lack of transparency in the public finances.

COVID -19 POLICYRESPONSES

A preparedness and response national plan to deal withthe pandemic has been designed with support fromdevelopment partners. The plan mainly focuses onactions to:

(i) strengthen early detection and surveillance andfoster technical and operational coordination within thegovernment;(ii) improve the quality of medical care to infectedpatients; and(iii) develop effective preventive communicationstrategies and enhance medical logistic platforms.

The plan’s budget is estimated at US$135 million (0.3percent of GDP). The following measures wereapproved the week of April 12th by the Prime Minister:

i) a three-month VAT exemption on pharmaceuticalproducts and basic goods,ii) suspension of tax audits for companies,iii) a grace period for businesses on tax arrears,iv) full tax deductibility of any donations made to theCOVID relief fund. The week of April 19, an additionalset of measures were adopted, namely:v) provision of water and electricity for a period of twomonths, free of charge,vi) prohibition to evict renters in case of no payment offinancial obligations from March to June 2020,vii) suspension of VAT collection on the production andon the sales of basic goods.

FISCAL POLICY

MONETARY POLICY

On March 24, the central bank (BCC) announcedseveral measures to ease liquidity conditions by:

reducing the policy rate by 150 bps to 7.5percent;eliminating mandatory reserve requirements ondemand deposits in local currency; andcreating a new collateralized long-term fundingfacility for commercial banks of up to 24 monthsto support the provision of new credit for theimport and production of food and other basicgoods.

The BCC has also postponed the adoption of newminimum capital requirements and encouraged therestructuring of non-performing loans. In addition,the BCC announced measures to reducecontamination risks in bank notes and promote theuse of e-payments.

EXCHANGE RATE

No measures.


IMPACTS ONMARKETS &FOOD SECURITY

In recent years, Ebola spread across communitiesin DRC that were already beset by the severehardships of extreme poverty and insecurity. Themain impact of COVID19 will be on the informalmarkets and the rural communities in DRC whichmay not feel the benefit of the fiscal and monetaryresponse measures of the government which aim atreducing the impact on businesses and the spreadof the virus. There will be increased need of foodassistance due to loss of incomes and movementrestrictions.

ESWATINI MACRO-ECONOMIC

OVERVIEW 4

The fiscal deficit will widen to 11.3% ofGDP in 2020 (from an estimated 7.1% in2019) as government revenue collapsesand spending stays high. The current-account balance will move from deficit in2019 to surplus in 2020 as the import billdeclines sharply, owing to plummeting fuelprices and dampened consumer demand.The surplus will remain in 2021 as importsremain weak in that year. Real GDP isexpected to contract by 5.6% in 2020 fromestimated growth of 0.8% in 2019, but itwill rise again in 2021, by 0.9%, owing to aglobal contraction arising from thecoronavirus pandemic.

ECONOMICSTRUCTURE RISKInflation in eSwatini broadly tracks price trends in South Africa—the source of most ofits imports. It is forecast that inflation in eSwatini will rise from an estimated 2.6% in2019 to 3.9% in 2020. In 2021 inflation is expected to increase to 4.4%, owing to arecovery in aggregate demand (as growth picks up to 0.9%, in line with a global andSouth African recovery) and a further rise in inflation in South Africa.

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BALANCE OFTRADE

Eswatini’s trade is highly dependent on SouthAfrica (80 percent of total imports and 60percent of exports). It is a member of theSouthern African Customs Unions and half ofthe trade revenues come from re-exports. Itsmain exports include: sugar, wood pulp, beefand drink concentrates. Swaziland is a netimporter of food, fuel and machinery. Maintrading partners are South Africa,Mozambique, Botswana and Namibia. Eswatinirecorded a trade surplus of 432.70 SZL Millionin the second quarter of 2019.



In FY19/20 (ending March 31, 2020), a supplementarybudget was approved for additional public healthcare ofE100 million (0.14 percent of GDP). Low priorityrecurrent spending will be redirected to the fight againstthe pandemic and a portion of the capital budget will bereallocated towards refurbishing hospitals andcompleting new hospitals. Additional expenditurepolicies are being considered but have not yet beenfinalized. Revenue measures to mitigate the impact ofthe virus include:(i) taxpayers projecting losses will file loss provisionalreturns and no payment will be required;(ii) extension of returns filing deadlines by 3 monthsbefore penalties kick-in;(iii) payment arrangements for taxpayers facing cashflow problems;(iv) waiver of penalties and interest for older tax debts ifprincipal is cleared by the end of September 2020; and(v) up to E90 million (0.13 percent of GDP) in tax refundsfor SMEs that have complied with tax obligations, retainemployees, and continue to pay them during this period.

The authorities have reduced the price of fuel andpostponed the planned increase in water and electricityprices.

FISCAL POLICY MONETARY POLICY

The Central Bank of Eswatini has: (i) reduced thediscount rate twice by a cumulative 200 basis pointsto 4.5 percent; (ii) reduced the reserve requirementto 5 percent (from 6 percent); (iii) reduced theliquidity requirement to 20 percent (from 25) forcommercial banks and to 18 percent (from 22) forthe development bank; (iv) encouraged greater useof electronic payments; and (v) encouraged banks toconsider loan restructuring and repayment holidays.Banks have announced that those individuals andcompanies that need short term financial support orrelief can approach them and each application willbe assessed on a risk-based approach

EXCHANGE RATE

No measures.

The exchange rate has depreci ated by17% this year, but no measures have

been taken.

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The fiscal and monetary policy measuresimplemented by the government do not scale upsupport for rural communities or the informalsector which may lose incomes due to thepandemic imposed restrictions. This could beattributed to the collapse of government revenuesmentioned earlier. The need for food assistancetransfers will therefore increase. A devaluationagainst the US dollar and rising inflation in SouthAfrica will outweigh a coronavirus-relatedcontraction in domestic aggregate demand in 2020and a sharp decline in global fuel prices.

LESOTHOMACRO-ECONOMIC

OVERVIEW 5

Real GDP is expected to contract by 4.1%in 2020, from 1.8% estimated growth in2019, reflecting the global contractionstemming from the coronavirus pandemic.In 2021 the economy is expected to pickup, growing by 0.9%, driven by growth inthe construction and mining sectors.

The fiscal deficit will widen to 8.1% ofGDP in fiscal year 2020/21 (April-March),from an estimated 4.9% in 2019/20, ashealthcare spending increases and exportrevenue declines. It will narrow to 7.7% ofGDP in 2021/22 as the economy growsand revenue increases.

ECONOMICSTRUCTURE RISK

Inflation is expected to edge down to 4.7% in 2020, as a result of a decline in global fuelprices and low consumer demand. In 2021 inflation will pick up to 5%, reflecting arecovery in global fuel and food prices. By maintaining a minimum floor for netinternational reserves, the Central Bank of Lesotho will seek to ensure that Lesotho'sreserves are kept at a level consistent with sustaining the loti's peg to the South Africanrand. The EIU expects the current-account deficit to widen to 6.8% of GDP in 2020,from an estimated 3% in 2019, as diamond exports plummet. The deficit will narrow to3.3% of GDP in 2021, reflecting an increase in agricultural and mining exports.

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BALANCE OFTRADE

Lesotho runs systemic trade deficits dueto import dependency on fuel, food andcapital equipment. The main exports are:clothing (40 percent of total exports),diamonds (22 percent), road vehicles,water and wool. Main trading partner arethe United States and South Africa.Lesotho recorded a trade deficit of3234.50 LSL Million in the third quarterof 2019.



On April 13, the prime minister’s speech unveiledupdated fiscal measures to support food security and toassist those most affected by the crisis. (i) R1.2 billionhas been allocated, and R500 millions of that goes to aContributory Fund that the government has started. (ii)R200 million will be spent on agriculture for foodproduction, while social protection schemes will beexpanded. (iii) The government will pay affected textilesworkers a subsidy for three months. (iv) The governmentwill also pay business rentals in May and defer certaintaxes until September. (iv) The country is also improvingcredit facilities for SMEs, guaranteeing 75 percent ofprincipal rather than 50 percent.

FISCAL POLICY

MONETARY POLICY

On March 23, 2020, following an extraordinarymeeting of the Monetary Policy Committee (MPC),the Central Bank of Lesotho (CBL) announced (i) anincrease of the NIR target floor from US$630million to US$660 million, and (ii) a reduction of theCBL policy rate by 100 basis points from 6.25 to5.25 percent. To encourage the use of non-cashpayments, the CBL has negotiated with mobilenetwork operators the removal of fees fortransactions below M50 and temporarily raisedmobile money transaction limits. On April 14,following another extraordinary meeting of theMPC of the CBL announced a reduction of the CBLpolicy rate from 5.25 to 4.25 percent.Additional financial sector measures were alsounveiled in the PM’s speech: (i) Banks and insurancecompanies have been asked to suspend loanrepayments for three months, and insurancecompanies asked to suspend instalment payments.(ii) The implementation of Basel II.5 was postponedto free up funds that would otherwise go towardsadditional capital buffers.

No measures.

EXCHANGE RATE

No measures. The local currency ispegged to South Africa’s Rand, which

has depreciated substantially since theCovid-19 outbreak



In contrast to the response of eSwatini, Lesothoaims to expand its safety net programme to providegrants for informal traders and the vulnerable inresponse to the pandemic. However, this may notbe a practical solution considering its direeconomic and political situation and overallefficiency and effectiveness of such measures arequestionable. The country will bear the negativeimpact of COVID on food availability in its markets(mostly urban) as well as incomes from unskilledwork and remittances from family in South Africawill be impacted.

MADAGASCARMACRO-ECONOMIC

OVERVIEW 6The government's revenue and spending planswill rely heavily on continued donor aid in 2020.An overall reduction in spending will remainpolitically challenging, but the government isexpected to tighten real fiscal spending in2020-21 owing to IMF pressures. Real GDPgrowth will fall from an estimated 5% in 2019to an average of 4.8% in 2020-21 as a dip intourism is balanced by capital expenditureincreases, while sectors like mining benefitfrom the Initiative pour l'émergence deMadagascar over the forecast period. TheEconomist Intelligence Unit expects averageinflation to decline from an estimated 6.4% in2019 to 6% in 2020, owing mainly to fallingglobal oil prices, before increasing in 2021 to6.7% as global oil prices rise and importedinflation increases. The current-account deficitis expected to widen steadily, from anestimated 2.1% of GDP in 2019 to 5.9% of GDPin 2021, owing to robust import growth duringthe forecast period, in line with to thegovernment's development agenda.

BALANCE OF TRADEMadagascar’s systemic trade deficit is due to thecountry’s dependency on the imports of fuel andcapital equipment. Madagascar is a net exporterof graphite, coffee and vanilla. Main tradingpartners are: France, China and Indonesia.Madagascar recorded a trade deficit of 194,250million MGA in December of 2019.

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COVID -19POLICYRESPONSES

FISCAL POLICY

MONETARY POLICY

EXCHANGE RATE

The authorities are maintaining the flexibleexchange rate regime. Based on the latest

available data, the central bank made somelimited interventions, and the exchange rate

depreciated by about 3.8 percent vis-à-vis US$since the beginning of the year.

Key measures include: (i) increased spending onepidemic prevention and control; (ii) cash-transfers and in-kind necessities to the poorestand those unemployed; and (iii) tax relief,suspension of government fees and waivedsocial contributions. Due to very limitedresources, the authorities are actively seekingadditional budget support from developmentpartners, beyond what was already disbursedor committed. On April 3, 2020, IMF approved adisbursement under the Rapid Credit Facility(RCF) equivalent to $165.9 million to meet thelarge external financing gaps arising fromCovid-19. On March 12, 2020, the World Bankprovided a grant of $3.7 million to strengthenprevention against the COVID-19 pandemic,purchase materials and equipment, and trainhealth workers. On April 2, 2020, the WorldBank approved $100 million DevelopmentPolicy Operation (DPO) for budget support toimprove the human capital. The government isworking on a revised budget law that willconsider additional fiscal and support measuresto be presented to parliament.

The central bank provided monetary policy support andacted to safeguard financial stability. The central bankhas started to provide liquidity to the private sector,planning up to MGA620 billion (about 1.2 percent ofGDP) to allow banks to defer delayed payments onexisting loans and increase lending to businesses.

IMPACTS ONMARKETS &FOOD SECURITYAn exchange rate depreciation will increase local foodprices and depending on how the incomes ofhouseholds are impacted due to the pandemic (fall inexports, fall in market demand, remittances etc), thiswill undermine household food security. Movementrestrictions due to the pandemic will impact incomesand food security of the population. Sectors such aslivestock, however, could see decreased demand as themain consumer base, urban populations, would not beable to access markets. The movement restrictions willalso negatively impact the income of small suburbanvegetable farmers and informal sector workers andother daily wage earners.


MALAWIMACRO-ECONOMIC

OVERVIEW 7

The government will focus on promoting private-sector activity through market liberalisation andproductive public capital investment, whilepreserving debt sustainability. However, progresson fiscal consolidation will be slow. The ReserveBank of Malawi (RBM, the central bank) is likely tocut the policy interest rate in mid-2020, as itexpects inflation to moderate in 2020. Thereafter,as global oil prices increase and inflationarypressures build, the RBM will start a monetarytightening cycle. Real GDP growth is expected toaverage 5% in 2020-24, owing to an increase ingovernment support to cash crop production.Economic growth will also be supported bymeasures to promote the private sector. Thecurrent-account deficit will narrow from anestimated 15.8% of GDP in 2019 to 13.1% of GDPin 2020, owing to lower global fuel prices andrising agricultural export earnings. The deficit willwiden to 14.5% of GDP in 2024 as the import billgrows.

BALANCE OF TRADEMalawi’s landlocked location increases import costs and poses an obstacle to exports. Malawi isdependent on imports of fuel and consumer goods. However, tobacco trade (55 percent of totalexports) represents a major source of income for the country. Malawi’s main trading partners are:South Africa, Zambia, China and United States. Malawi recorded a trade deficit of 91,901 MWKMillion in June of 2019.

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FISCAL POLICY

MONETARY POLICY

EXCHANGE RATE

No measures.

The government’s response plan includes US$20million (0.25 percent of GDP) in spending on healthcare and targeted social assistance programs; thisincludes hiring 2000 additional health care workers. Inaddition, tax waivers will be granted on imports ofessential goods to manage and contain the pandemic.

The domestic currency Liquidity Reserve Requirement(LRR) has been reduced by 125 basis points to 3.75percent (aligned with the foreign currency LRR) andthe Lombard Rate has been reduced by 50 percent to0.2 percentage points above the policy rate. AnEmergency Liquidity Assistance (ELA) framework hasbeen introduced to support banks in the event ofworsening liquidity conditions and to provide supportto banks on a case-by-case basis. However, financialsector buffers, including banks’ capital and liquiditybuffers, are expected to counter risks to the bankingsystem. To support small and medium enterprises(SMEs), commercial banks and micro-financeinstitutions will be, on a case-by-case basis,restructuring SME loans and providing a three-monthmoratorium on their debt service. Fees on mobilemoney transactions have been temporarily waived toencourage cashless transactions.


COVID-19 restrictions on transport out of othercountries will negatively impact supplies in Malawi.Dependence on subsistence agriculture could increaseas a result. Incomes from agriculture labour will declineovertime and hamper household demand as COVID-19restrictions take hold on local markets.

EXCHANGE RATE

No measures

8 MOZAMBIQUEMACRO-ECONOMIC OVERVIEW The coronavirus will weigh on the economy and exports; TheEconomist Intelligence Unit expects the economy to contractby 2.4% in 2020, after which it will return to growth of 6.3% ayear on average in 2021-24, driven mainly by the gas industry. Itis expected that fiscal deficit will widen in 2020 as expenditurerises, before contracting in 2021 as government spending dips.Accelerating economic growth and gas earnings will boostgovernment revenue and cause the deficit to narrow through to2024. The current-account deficit will widen to 20.4% of GDPin 2020 as exports decline. The deficit will widen to 32.2% ofGDP in 2023, as capital goods imports for the gas industry rise.In 2024 the deficit will narrow to 27 of GDP as gas exportsincrease.

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Economic structure risk remains C-rated, with thescore unchanged at 85. A lack of diversificationaway from mineral exports sustains economicstructure risk, which has been exacerbated by thefall in energy demand caused by the globalcoronavirus outbreak. Other structuralconstraints include low income per head and anenormous stock of public debt.


BALANCE OFTRADE

Mozambique exports mainly aluminum, electricenergy, tobacco, natural gas, sugar and prawns.Mozambique imports machinery andequipment, vehicles, fuel, chemicals, metalproducts and foodstuffs. Mozambique maintrading partners are South Africa, Netherlands,Portugal and China. Mozambique recorded atrade deficit of 624.80 USD Million in thefourth quarter of 2019.


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EXCHANGE RATE

SOVEREIGNRISK

Sovereign risk remains CC-rated, although the scorehas improved by 2 points to 76, owing to an uptick inforeign exchange reserves. Existing financing andliquidity risks have been exacerbated by the globalcoronavirus pandemic and a subsequent economiccontraction. The sovereign remains officially indefault on previously hidden debt, and financingavenues are severely curtailed, which makes widefiscal and current-account deficits all the more risky.

The government has increased the budget allocationfor health, from about MT 2 billion (or about 0.2percent of GDP) to about MT 3.3 billion (0.3 percentof GDP). In addition, the Government is askingMozambique’s development partners for US$ 700million for help to deal with the economic impact ofthe pandemic. This fiscal package would financetemporary and well-targeted tax exemptions tosupport families and the health sector (VAT andimport tariff exemptions on food, medicine andmedical equipment), and (ii) higher spending torespond to the health crisis and humanitarian needs,including higher health related spending on goods andservices, and higher cash transfers and subsidies tothe poorest households as well as micro-businessesand SMEs.

FISCAL POLICY

To ease liquidity conditions, on March 16, the centralbank reduced reserve requirements by 150 basispoints for both foreign currency and domesticcurrency deposits (to 11.5 percent and 34.5 percentrespectively) . On March 22, it announced measures tosupport financial markets and encourage prudent loanrestructuring by: (i) introducing a foreign currencycredit line for institutions participating in theInterbank Foreign Exchange Market, in the amount ofUS$ 500 million, for a period of nine months; and (ii)waiving the constitution of additional provisions bycredit institutions and financial companies in cases ofrenegotiations of the terms and conditions of theloans, before their maturity, for clients affected by thepandemic, until December 31. On March 30, thecentral bank announced measures to easy paymentsystem transactions and liquidity conditions by: (i)lowering fees and charges for digital transactionsthrough commercial banks, mobile banking and e-currency, for a period of three months, and (ii) waivingspecific provision on foreign currency loans, untilDecember 31. The central bank reduced the policy rateby 150 bps to 11.25 percent on April 16.

MONETARY POLICY

The metical has been allowed to adjust flexiblyand has depreciated by almost 3 percent against

the US dollar since early March 2020.


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Depreciation of currency will increase inflation. The fiscal health of the country coupled with fall in energydemand does not bode well in the short-mid-term. Due to the restrictions in place, income earningopportunities for poor urban households may get negatively impacted and this will in turn affect levels of foodsecurity in urban areas negatively. The government has promptly requested support from its developmentpartners, but the cost may still be too high for all involved due to ongoing recovery response from CyclonesIdai and Kenneth as well as the ongoing droughts in the country.


NAMIBIAMACRO-ECONOMIC

OVERVIEW

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Economic policy in 2020-24 will be constrainedby low growth and a weak mining sector, but apolicy framework for private participation informerly state-dominated sectors such as energyand water should attract some investment ininfrastructure. The fiscal deficit will narrowslowly but steadily from 5% of GDP in 2020 to2.9% of GDP in 2024 as economic growthstrengthens as the forecast period progresses,bringing with it a recovery in governmentrevenue. Real GDP growth will average just 2.3%a year in 2020‑24, with a 0.5% contraction in2020. The subdued outlook reflects a slump inmineral exports, slow regional growth and thelong-term impact of post-election austeritymeasures on government consumption. Annualinflation will remain within the central bank'sinformal 3‑6% target range. The headline ratewill broadly follow price trends in South Africa,Namibia's largest trading partner, but will berestrained by sluggish growth and concomitantlystagnant demand. The current account willremain in deficit (averaging 3.6% of GDP duringthe forecast period) in 2020-24, moving in linewith fluctuations of the trade balance.


Economic structure is Namibia's riskiest category, with arating of B[20]. The score has worsened by three points to 58since our previous assessment. Debt levels are stable, but theongoing recession is threatening liquidity and fiscalsustainability, adding to existing structural vulnerabilities,including a wide current-account deficit, persistent fiscaldeficits and an overdependence on mineral exports.

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BALANCE OFTRADE

Namibia exports mostly diamonds (25% of totalexports), uranium, lead, zinc, tin, silver,tungsten, food and live animals andmanufactured products. Namibia's mainexports partners are South Africa (27% oftotal), United Kingdom (17%), USA, Angola,Netherlands and Spain. Namibia imports foodproducts; petroleum products and fuel,machinery and equipment and chemicals. SouthAfrica is Namibia’s major import partner (66%of total imports), followed by the Netherlands,United Kingdom and China. Namibia recordeda trade deficit of 3429.50 NAD Million in thefourth quarter of 2019.


SOVEREIGNRISK

Sovereign risk remains BB-rated, although the scorehas worsened by 2 points to 49 as a result of anenduring economic recession aggravated by falls inforeign-exchange earnings from tourism andmineral exports. The government's austerityprogramme to rebalance the public financescontinues to weigh heavily on economic growth.Fiscal rebalancing through spending cuts will takeseveral years to complete, given the size of thenecessary correction.


The government has increased the budget allocationfor health, from about MT 2 billion (or about 0.2percent of GDP) to about MT 3.3 billion (0.3 percentof GDP). In addition, the Government is askingMozambique’s development partners for US$ 700million for help to deal with the economic impact ofthe pandemic. This fiscal package would financetemporary and well-targeted tax exemptions tosupport families and the health sector (VAT andimport tariff exemptions on food, medicine andmedical equipment), and (ii) higher spending torespond to the health crisis and humanitarian needs,including higher health related spending on goods andservices, and higher cash transfers and subsidies tothe poorest households as well as micro-businessesand SMEs.

FISCAL POLICYTo ease liquidity conditions, on March 16, the centralbank reduced reserve requirements by 150 basispoints for both foreign currency and domesticcurrency deposits (to 11.5 percent and 34.5 percentrespectively) . On March 22, it announced measures tosupport financial markets and encourage prudent loanrestructuring by: (i) introducing a foreign currencycredit line for institutions participating in theInterbank Foreign Exchange Market, in the amount ofUS$ 500 million, for a period of nine months; and (ii)waiving the constitution of additional provisions bycredit institutions and financial companies in cases ofrenegotiations of the terms and conditions of theloans, before their maturity, for clients affected by thepandemic, until December 31. On March 30, thecentral bank announced measures to easy paymentsystem transactions and liquidity conditions by: (i)lowering fees and charges for digital transactionsthrough commercial banks, mobile banking and e-currency, for a period of three months, and (ii) waivingspecific provision on foreign currency loans, untilDecember 31. The central bank reduced the policy rateby 150 bps to 11.25 percent on April 16.

MONETARY POLICY

EXCHANGE RATE

No measures

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IMPACTS ONMARKETS & FOODSECURITY

Building off from the negative impacts of the dry weatherconditions of 2019, Namibia will face the impact ofCOVID19 primarily channelled through a reduction ineconomic activities and associated income losses, whilepotential breakdowns in food supply chains is anadditional concern for food security. Despite an expectedseasonal improvement in food security with the main2020 harvest, the risks posed by the COVID‑19 pandemiccould cause an increase in the prevalence of malnutrition.

10REPUBLIC OF CONGOMACRO-ECONOMIC

OVERVIEW In 2020, the effects of the COVID-19 pandemicare projected to reduce real GDP growth(including through lower mining activity), increaseconsumer prices (particularly of importedproducts), reduce fiscal revenue (both mining andnon-mining), and increase fiscal spending throughthe implementation of a COVID-19 response plansoon to be approved. Congo, as most of oilproducers, is being hit by two shocks—thepotential spread of COVID-19 and the sharpdecline in oil prices.


Economic structure risk remains CC-rated, but the score hasdeteriorated by 5 points to 80. The current-account deficithas widened as exports have dropped, creditworthiness islow, and Congo-Brazzaville is still in default. The economyremains exposed to fluctuations in the oil sector, whichconstitutes almost 40% of GDP and 70% of export receipts.

SOVEREIGNRISK

The sovereign risk rating remains at CCC[23], butthe score has deteriorated by 3 points to 65 aseconomic activity is being tempered by decliningoil production, putting exports in a slump.Following sustained reform efforts and fiscalconsolidation, the government secured an IMFagreement in 2019. Despite improvements, thestock of debt remains unsustainable, and anupgrade is not likely, as we do not expect Congo-Brazzaville to be able to clear all its principalarrears, owing to low foreign reserves.

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The overall cost of the response plan to the COVID19 epidemic has been estimated at US$170 million(100 billion XAF), equivalent to 1.6 percent of 2020GDP, to date the government has made available tothe Ministry of Health the amount of US$1.4 million.The EU, WFP, France are getting together to providesupport for the poorest segments of the populationwith combined support amounting to about 3 billionXAF as of now.

The government has adopted some measures toease tax and duty payments for private enterprises.In particular, more time has been given to companiesto pay their taxes and tax assessments on site havebeen abandoned. The import duty directorate is alsostrongly encouraging electronic payment of duesand allowing more electronic documents to beaccepted at the port. Corporate income tax has beenreduced to 28 percent from 30 percent andwithholding tax has been reduced to 5 percent from7 percent.

FISCAL POLICY

On March 27, 2020, BEAC announced a set ofmonetary easing measures including a decrease of thepolicy rate by 25 bps to 3.25 percent, a decrease of theMarginal Lending Facility rate by 100 bps to 5 percent,a suspension of absorption operations, an increase ofliquidity provision from FCFA 240 to 500 billion, and awidening of the range of private instruments acceptedas collateral in monetary operations. The MPC alsosupported BEAC’s management’s intent to propose toreduce haircuts applicable to private instrumentsaccepted as collateral for refinancing operations, andto postpone by one-year principal repayment ofconsolidated central bank’s credits to member states,but these possible additional measures are noteffective yet. On March 25, 2020, the COBACinformed banks that they can use their capitalconservation buffers of 2.5% to absorb pandemic-related losses but requested banks to adopt arestrictive policy with regard to dividend distribution.Discussions are taking place at the country level onwhether private companies can have access to the 100billion XAF fund set up by the President and onsimplifying access to refinancing instruments. Aguarantee scheme has been set up to help privatecompanies service their banking debts, but no detailshave been provided on the amounts or conditions.

MONETARY POLICY

EXCHANGE RATE

No measures


IMPACTS ONMARKETS & FOODSECURITY

The main impact of COVID19 will be on theinformal markets and the rural communities inRepublic of the Congo which may not feel thebenefit of the fiscal and monetary responsemeasures of the government which aim atreducing the impact on businesses and the spreadof the virus. There will be increased need of foodassistance due to loss of incomes and movementrestrictions. WFP with its partners will need toscale up humanitarian support.

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TANZANIAMACRO-ECONOMIC

OVERVIEW 11The policy focus in 2020 will be on the country'sresponse to the coronavirus pandemic on all fronts.Thereafter, economic policy will focus onindustrialisation, but protectionist tendencies willdeter the private investment that is needed toachieve this objective.

The fiscal deficit will widen until fiscal year2020/21(July-June), reaching 3.5% of GDP, asincreased health spending is undertaken amid thecoronavirus outbreak. Thereafter, publicinvestment growth will keep the deficit elevated,before contracting in 2023/24. Strong public andprivate infrastructure investment will supportannual average real GDP growth of 5.8% in 2022-24.

The current-account deficit/GDP ratio will widen to3.7% in 2020, before contracting to 3.3% in 2021 asexport earnings recover. Capital imports will keepthe deficit elevated in 2022-24, albeit with adeclining trends in the latter half as exports rise.

BALANCE OFTRADE

Tanzania major exports are agriculturalcommodities with tobacco, coffee, cotton,cashewnuts, tea and cloves being the mostimportant. Other exports include gold andmanufactured goods. Tanzania main exportspartners are India, Japan, China, United ArabEmirates, Netherlands and Germany. Tanzaniaimports mostly transport equipment, machinery,constructions materials, oil, fertilizers, industrialraw materials and consumer goods. Main importspartners are: China, India, South Africa, Kenya andUnited Arab Emirates. Tanzania recorded a tradedeficit of 610.20 USD Million in the fourth quarterof 2019.


Economic structure risk has been downgraded from B[26]to CCC[27], primarily reflecting the country's increasedreliance on exports of metals and precious stones forexport earnings. This dependency exposes the externalsector to shocks (both price and demand) during a time ofglobal recession. The economy's vulnerability to poorweather is perpetuated by reliance on rain-fedagriculture.

SOVEREIGNRISK

Sovereign risk has been downgraded from BB to B, withthe underlying score having deteriorated by 3 points to50. Debt-related indicators remain within prudent limits,with the gross public debt stock at 31.3% of GDP and thedebt-service/GDP ratio at 12.8%. However, elevatedfinancing and liquidity risks, coupled with economic risksfrom the coronavirus outbreak, weigh oncreditworthiness.

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Loss of revenue from exports and tourism will affect thelevel of sovereign debt and debt service ratios and inturn the ability for the government to declare robustfiscal and monetary measures. Movement restrictionswill impact local and urban markets and in absence ofexpansionary fiscal measures from the government, lossof incomes will lead to increased food insecurity forthose in the rural and informal sectors.

COVID -19POLICYRESPONSES

The Government of Tanzania enhanced preparedness and its containment capacity, includingmeasures to strengthen detection and surveillancecapacity at points of entry, such as airports andborder-crossing sites, and training of medical staffon case management, risk communication, andcommunity engagement. The plan focuses oncritical priorities and amounts to US$77 million.The government has provided initial resources forits financing and is working with developmentpartners to secure more financing.

FISCAL POLICY

No measures

MONETARY POLICY

EXCHANGE RATE

No measures

12ZAMBIA

MACRO-ECONOMICOVERVIEW

The Zambian economy will be adversely impacted bythe large decline in copper prices, sharp depreciationof local currency, increase in yields on public debt,and economic disruptions due to lockdowns intrading partners. An IMF loan deal is not expected topass, but emergency aid will be made available as thegovernment attempts to meet its spending needsduring the coronavirus outbreak. While a sovereigndefault is not expected, its risk is growing sharply.Fiscal policy will be lax in 2020 as the governmentreleases fiscal stimulus while pursuing a debt-financed infrastructure programme.

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Loss of revenue from exports and tourism will affect the level of sovereign debt and debt service ratios and inturn the ability for the government to declare robust fiscal and monetary measures. Movement restrictions willimpact local and urban markets and in absence of expansionary fiscal measures from the government, loss ofincomes will lead to increased food insecurity for those in the rural and informal sectors.


Economic structure risk is Zambia's worst-ratedrisk category, at CC, but the score has improved by5 points, to 70, as the annual average current-account deficit over the past 48 months is lowernow than it was in our previous assessment.However, a narrow, commodity dependent exportbase, low income per head and a heavy externaldebt burden means Zambia remains highlyvulnerable to changes in copper prices andweather patterns.


BALANCE OFTRADE

Zambia’s trade surpluses are the result of copperexports. Zambia also exports: sugar, tobacco,gemstones and cotton. Zambia is a net importer offuel and machinery. Zambia’s main trading partneris China followed by South Africa and Congo-Kinshasa. Zambia recorded a trade surplus of 422ZMK Million in December of 2019.

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The Zambian government has announced a releaseof 2.64 billion-kwacha (0.75 percent of GDP) toclear arrears and pay contractors. Import duties onmineral concentrate and export duties on preciousmetals were suspended to support the miningsector. The government has waived tax penaltiesand fees on the outstanding tax liabilities resultingfrom CoVID-19, suspended customs duties and VATon some medical supplies, removed provisionsrelating to claim of VAT on imported spare parts,lubricants and stationery to ease pressure oncompanies. The government had set up an EpidemicPreparedness Fund amounting to 57 million kwacha(0.02% of GDP) and had approved a COVID-19Contingency and Response Plan with a budget of659 million kwacha (0.2% of GDP). Furthermore,400 doctors and 3000 paramedics were recruited tofight the COVID-19 pandemic.[31]

FISCAL POLICY

The Bank of Zambia (BoZ) plans to provide 10billion kwacha (3% of GDP) of medium-termliquidity support to eligible financial servicesproviders and scale up open-market operations toprovide short-term liquidity support to commercialbanks. In addition, BoZ implemented severalmeasures to stimulate the use of e-money andreduce the use of cash, revised the rules governingthe operations of the interbank foreign exchangemarket to support its smooth functioning,strengthening market discipline and providing amechanism to address heightened volatility,revised loan classification and provisioning rules,and extended the transitional arrangement toIFRS9[32].

MONETARY POLICY

EXCHANGE RATE

No measures


Loss of revenue from exports and tourism will affectthe level of sovereign debt and debt service ratiosand in turn the ability for the government to declarerobust fiscal and monetary measures. Movementrestrictions will impact local and urban markets andin absence of expansionary fiscal measures from thegovernment, loss of incomes will lead to increasedfood insecurity for those in the rural and informalsectors.


ZIMBABWEMACRO-ECONOMIC

OVERVIEW 13The clearance of arrears owed to multilateralcreditors is one of the main conditions for afinanced IMF deal. Such an agreement is unlikelyto be forthcoming, as relations with Westerninstitutions remain poor and progress on reform isslow. Government reform efforts will remainconstrained by the ongoing economic and politicalcrisis. A staff-monitored programme (SMP) withthe IMF finished in February, with the Fund givinga dire assessment of progress. As coronaviruscases increase, the president, EmmersonMnangagwa, declared a national emergency.However, the informal nature of the economy willmake restrictions difficult to enforce, and thehealthcare sector is underfunded and poorlyequipped. As most aid bypasses official channels,it does not show up as government revenue. As aresult, the fiscal deficit is larger than it wouldotherwise be if the government were trusted tospend aid responsibly. The Economist IntelligenceUnit expects inflation to average 320.7% in 2020,owing to shortages of basic goods and US dollars,as well as sustained currency weakness. Inflationwill fall thereafter as confidence in the currencyand the government is gradually rebuilt. Thecurrent-account deficit will narrow to 1.5% ofGDP in 2020 as imports decline. The deficit willthen widen, reaching 3.2% by 2024, reflecting awidening of the primary income deficit andnarrowing of the secondary income surplus.

BALANCE OFTRADE

In recent years, Zimbabwe has run systemic tradedeficits due to decline in exports. Zimbabwe is a netimporter of fuel and capital goods. Main export istobacco (23 percent of total exports). Others includenickel (20 percent), diamonds and platinum.Zimbabwe’s main trading partners are South Africaand China. Zimbabwe recorded a trade surplus of70.30 USD Million in December of 2019.


Economic structure risk remains CC-rated, with the scoreunchanged at 75. Commercial agriculture has beenweakened by the state's land-redistribution policies anddrought, and although mining investment continues, it isthreatened by the shortage and high cost of capital andenergy. SOVEREIGN

RISK

Sovereign risk remains C-rated, although the scoreworsens by 1 point to 84 as economic conditionsworsen (with the economy in stagflation owing toprotracted power outages and drought) andsevere economic distortions, fiscalmismanagement and a lack of transparencycontinue to impair creditworthiness. Thesovereign's obligations are beyond its repaymentcapacity, owing to the severe financial crisis andthe country's exclusion from international creditmarkets.

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The authorities’ requirements to fight Covid-19, asper the humanitarian appeal stood at US$220million targeting prevention and control of thedisease including awareness campaigns. To date, theauthorities have availed over ZWL$100 million andUS$2 million to fight against COVID-19. In addition,they have started administering a ZWL$600 millioncash transfer program that targets 1 millionvulnerable households over the next 3 months; havebegun to enlist small and medium-size businessesand informal traders that are affected by thelockdown for a bailout by government (no amounthas yet been allocated to this cushioning package);the freeze on government hiring has been lifted forthe health sector, targeting 4000 additional medicalpersonnel (about 20 percent increase); companieshave been allowed to extend the payment ofcorporate taxes (waiving interest and penalties); andduties and taxes on various goods and servicesrelated to COVID-19 have been suspended,including on testing, protection, sterilization, andother medical consumables. Due to limited fiscalspace, the Ministry of Finance is targetingexpenditure reprioritization by redirecting capitalexpenditure towards health-related expendituresincluding water supply and sanitation programs,including directing the 2 percent IntermediatedMoney Transfer Tax, which is currently ring-fencedfor social protection and capital developmentprojects, to COVID-19 related mitigatoryexpenditures. The authorities have relaxed someprocurement regulations with a view of facilitatingspeedy procurement of essential goods andservices.

FISCAL POLICY

In March 2020 the Reserve Bank of Zimbabwe(RBZ, the central bank) announced the resumptionof the use US dollars for local transactions (whichwas banned in June 2019) and the abandonment ofthe "managed float" exchange-rate system (whichhad been adopted weeks earlier), with a new peg ofZ$25:US$1. It reduced the bank policy rate from35% to 25%, reduced the statutory reserve ratiofrom 5% to 4.5%, And increased the private sec torlending facility from ZW$1 billion to ZW$2.5billion.

MONETARY POLICY

EXCHANGE RATE

Moved from a managed float ing exchange ratesystem to a fixed exchange rate manage ment

system.


The COVID-19 pandemic will severely impact analready critical food security situation arising mainlyfrom the prevailing poor macroeconomic conditionsand consecutive years of drought. The movementrestrictions associated with COVID-19 will significantlyimpact businesses and urban and rural livelihoods,further limiting household incomes. The pandemic willfurther add to the existing dire humanitarian needsfacing the country. A loss of income, imports, marketscould lead to a higher number of food insecurepopulation, especially in urban areas. International anddomestic remittances will decline in response todisruption of livelihoods internationally and locally,impacting both rural and urban household incomes,especially in southern areas bordering South Africa.


1. EIU2. A CC rating indicates the issuer is at greater risk of default than a CCC-rated issue and less than a C-rated issue ifbusiness, financial, or economic conditions change measurably.3. A CCC rating represents an extremely high risk bond or investment; banks are not allowed to invest in CCC ratedbonds. CCC bonds are junk bonds.4. Trading Economics / National Bank of Angola5. Trading Economics6. IMF7. EIU8. An obligor has ADEQUATE capacity to meet its financial commitments. However, adverse economic conditions orchanging circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitments.9. An obligor has STRONG capacity to meet its financial commitments but is somewhat more susceptible to the adverseeffects of changes in circumstances and economic conditions than obligors in higher-rated categories.10. EIU11. A CCC rating represents an extremely high risk bond or investment; banks are not allowed to invest in CCC ratedbonds. CCC bonds are junk bonds.12. EIU13. Central Bank of Eswatini14. EIU15. EIU16. EIU17. EIU18. Instituto Nacional De Estatistica, Mozambique19. EIU20. A B rating reflects an opinion that the issuer has the current capacity to meet its debt obligations but faces moresolvency risk than a BB-rated issue and less than a B-rated issue if business, financial, or economic conditions changemeasurably.21. Bank of Namibia22. World Bank Africa’s Pulse April 202023. EIU24. A CCC rating represents an extremely high risk bond or investment; banks are not allowed to invest in CCC ratedbonds. CCC bonds are junk bonds.25. EIU26. B rating reflects an opinion that the issuer has the current capacity to meet its debt obligations but faces moresolvency risk than a BB-rated issue and less than a B-rated issue if business, financial, or economic conditions changemeasurably.27. A CCC rating represents an extremely high risk bond or investment; banks are not allowed to invest in CCC ratedbonds. CCC bonds are junk bonds.28. Bank of Tanzania29. EIU30. Central Statistical Office, Zambia31. IMF32. Ibid33. EIU34. Zimstat, Zimbabwe

ENDNOTES

Created by:

Rupak Manvatkar - Content& AnalysisLeigh Hildyard - Design andEditing

Resilience & Market Accessunit - WFP RBJ

United Nations World FoodProgramme

Regional Bureau forSouthern Africa and IndianOcean Islands.

JohannesburgSouth Africa

MACRO- ECONOMIC OVERVIEW OF RBJ COUNTRIES

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