Standard Bank on Southern Africa PMI performance

Standard Bank on Southern Africa PMI performance CNBC Africa is joined by Kaneja Amani, Trader: Global Markets, Standard Bank for more. We are now going to dive into our macroeconomic focus with Standard Bank. We're joined by Kaneja Amani, Trader for Global Markets at Standard Bank Group. So Kaneja, let's dive straight into it. Southern Africa, there's been quite a few PMI data coming through, particularly Mozambique and Zambia, with both of them showing a lower number. Curious to get your thoughts. Let's start with Mozambique actually. Kaneja Amani, a Trader in Global Markets at Standard Bank Group, shed light on the recent PMI data coming out of Southern Africa, particularly focusing on Mozambique and Zambia. The PMI data for both countries has shown a decline, with Mozambique hovering around the neutral level of 50.2 and Zambia dropping to 48.1. Amani highlighted that both countries are facing tough business conditions, with lower output numbers, decreasing demand, and varying levels of price pressures on inputs. He emphasized that the economic environment in these countries remains challenging, reflecting a broader trend in sub-Saharan Africa. Amani also mentioned that South Africa experienced a drop in its PMI, aligning with the World Bank and IMF's revised growth expectations for the region due to external headwinds such as a strong dollar and high US interest rates. Despite the mixed bag of factors affecting the region, Amani pointed out the impact of foreign exchange rates as a primary driver of business costs. He noted the significant role of currency fluctuations in influencing import prices and highlighted the potential for import costs to decline in Zambia following a kwacha appreciation. In addition to discussing the PMI data, Amani addressed the debt restructuring efforts in Zambia, noting positive developments in negotiations with official creditors and bondholders. He expressed optimism towards the outcome of the restructuring process, citing Zambia as a potential blueprint for other countries facing similar challenges. Amani also provided insights into the foreign exchange landscape, particularly focusing on the kwacha's depreciation and increased investor interest in Zambia following the debt alleviation measures. He highlighted the correlation between oil production, oil prices, and currency depreciation in Angola, emphasizing the influence of external factors on regional currencies like the rand. Amani concluded by forecasting continued pressure on the rand in the CMA region, driven by US interest rates and dollar dynamics. Despite the economic uncertainties in Southern Africa, Amani remains cautiously optimistic about the region's resilience and the potential for positive outcomes in the face of challenges.