RFA Breakfast Paper - March 24, 2026

South Africa’s Leading Indicator Rebounds in January

The composite leading business cycle indicator in South Africa rose 0.4% month on-month in January 2026, recovering from a revised 0.4% decline in December. Gains in five of the ten components—led by higher US-dollar export commodity prices and a rebound in the RMB/BER Business Confidence Index—offset declines in the rest. Key drags included weaker growth in new passenger vehicle sales and a drop in domestic manufacturing orders. Meanwhile, the coincident indicator fell 0.2% in December, reflecting softer industrial output and trade activity, while the lagging indicator edged up 0.1%, pointing to mixed but stabilizing economic momentum.

Mixed PMI Signals Show Pressure from Conflict, but Resilience Persists

Global preliminary PMI data for March highlighted the impact of ongoing conflict on growth and inflation. In the U.S., manufacturing exceeded expectations, while services activity fell to an 11-month low. In the eurozone, both PMI readings and consumer confidence declined, with the latter recording its sharpest drop since the Russian invasion of Ukraine. These trends reflect rising energy costs and uncertainty, reinforcing the view that the conflict is weighing on growth while fueling inflation. Despite these pressures, underlying economic conditions remain supportive. Oil prices are at levels seen in 2011–2013 and 2022, periods that did not trigger a recession. Today, stronger fundamentals—including higher household income, lower debt levels, and low unemployment—provide added resilience. Continued investment in AI and innovation also supports growth, suggesting the economy can withstand near-term shocks, although the conflict’s duration remains a key risk.

Market Rebounds as Buying Interest Drives Broad Gains

The Nigerian equity market closed higher, with the NGX All-Share Index and Market

Capitalization both rising by 1.33%, reversing the previous session’s losses. Renewed buying in medium- and large-cap stocks such as AIRTELAFRI, GTCO, PRESCO, and TRANSCORP supported the rally. The index gained 2,654.40 points to close at 201,668.42, while market capitalization increased by ₦1.70 trillion to ₦129.45 trillion. Trading activity improved, with volume and value rising by 41.83% and 7.92% respectively. GTCO led both volume and value traded, followed by WEMABANK and UBA. Market breadth remained positive, with 36 gainers against 23 losers. AIRTELAFRI and other top performers recorded strong gains, while NPFMCRFBK led the laggards. Sector performance was broadly positive, as all five major sectors advanced, led by Insurance, with modest gains across Consumer Goods, Banking, Industrial Goods, and Oil & Gas, reflecting improved investor sentiment.