This Week in African Business and Economy:Top 5 Stories

1. Ghana's Economy Grew by 6.9% in the Second Quarter of 2024

Ghana recorded a robust economic growth rate of 6.9% in Q2 2024, driven largely by the agricultural, industrial, and services sectors. This performance marks a significant recovery compared to last year’s contraction, which was hampered by inflation and debt restructuring challenges. The agriculture sector, particularly cocoa and other food crops, led the surge, while improved manufacturing output and increased services activity contributed to the rise.

Despite the strong economic performance, challenges such as high inflation and fiscal deficit remain a concern for Ghana. The country's debt restructuring efforts and its agreement with the IMF have been critical in stabilizing its economy, though the road to long-term recovery is still underway.

2. South Africa’s Inflation Drops More Than Expected in August

South Africa’s inflation rate dropped to 4.3% in August, a steeper fall than anticipated. This marks the lowest inflation level since March 2022, driven by a decrease in food prices, fuel costs, and utilities. Economists expected inflation to remain above 5%, but global oil prices and reduced consumer spending contributed to the sharp decrease.

The South African Reserve Bank has maintained a tight monetary policy throughout the year to tackle inflation. While the current trend offers some relief to South African households, uncertainties around fuel prices and future interest rate hikes could challenge continued economic stability.

3. Kenyan Shilling Holds Steady Amid Tourism and Manufacturing Dollar Inflows

The Kenyan shilling has remained steady against the US dollar, supported by robust inflows from the tourism and manufacturing sectors. As tourism in Kenya experiences a revival post-pandemic, earnings in foreign exchange are helping to cushion the currency against external shocks. The manufacturing sector also played a role in stabilizing the currency by generating significant export revenue.

However, the shilling remains vulnerable to global market pressures, particularly the strength of the dollar and Kenya’s large public debt obligations. Experts suggest the need for continued diversification of revenue sources to protect the shilling in the long term.

4. Morocco Sees 11.7% Surge in Tax Revenues Through August 2024

Morocco has experienced a remarkable 11.7% increase in tax revenues in the first eight months of 2024, primarily fueled by economic recovery efforts and reforms in tax administration. The gains were observed across several tax categories, including value-added tax (VAT), corporate income tax, and customs duties. Authorities have credited improved collection methods and enforcement for the positive fiscal performance.

Despite the revenue boost, the government faces pressure to address the rising cost of living and energy subsidies, especially as global fuel prices continue to fluctuate. The government’s focus on efficient tax reforms is aimed at maintaining fiscal discipline while ensuring economic stability.

5. Wasoko and MaxAB Merge, Embrace Fintech to Boost Profits

In a major move for Africa's e-commerce sector, Kenyan B2B retail startup Wasoko has merged with Egyptian counterpart MaxAB. Both companies, which focus on supply chain solutions for small businesses, are now pivoting towards fintech as a core part of their business model. By offering digital payments, credit, and other financial services, the combined company aims to tap into the vast underbanked population across the continent.

The merger highlights the growing trend of e-commerce businesses turning to fintech to drive growth and improve margins. Both Wasoko and MaxAB see the shift to digital finance as essential for scaling operations and enhancing profitability in Africa’s highly fragmented market.